1  A 

A  = 

^=  <=  I 

AS 

S  en    I 
_  o   1 

o  S 

—  c   1 

o  m 

^=  ^    1 

=====  3D    1 

P  — 

_^_  Z     1 
===  33     1 

—     1 

2 

=  CD     1 

=  °     1 

2  5 

^^  Z    1 

: 

S^s^S  ' —    1 

3  ZZ 

^^^  ' — 
=^  65    1 

5  3D     1 

8  ■ 

====  >     1 

====■  30     1 
^^=  -<     I 

h  B 

^=  >     1 

9  m 

=^=  —     1 

^"^  ^H     1 

__    < 

4 

UNIVERSITY 

OF  CALIFORNIA 

LOS  ANGELES 


SCHOOL  OF  LAW 
LIBRARY 


The  Maryland  Budget 
Amendment 


rersity  of  ( 


■  ,  .  S3    .: 


AR  30  1927 


UWVEI, 


"Sfflg* 


DEPARTMENT    OF   LEGISLATIVE    REFERENCE 
BALTIMORE,    MARYLAND 


EXPLANATORY. 

So  many  requests  concerning  the  Maryland  budget  amend- 
ment  have  been  received,  that  it  has  seemed  desirable  to  put  into 
pamphlet  form  this  amendment,  the  report  of  the  Economy  and 
Efficiency  Commission  which  drafted  the  amendment,  and  the 
several  articles  prepared  by  the  members  of  this  Commission  in 
explanation  of  the  amendment,  together  with  an  article  on  "The 
State  Budget." 

It  is  hoped  that  this  pamphlet  may  be  of  value  to  the  officials, 
departments  and  institutions  of  Maryland  in  preparing  their 
requests  for  appropriations  to  be  contained  in  the  budget  bills 
to  be  submitted  by  the  Governor  at  the  next  meeting  of  the 
General  Assembly,  and  that  it  may  also  serve  the  purpose  of 
giving  information  to  the  officials  and  legislators  of  other  States 
who  wish  to  know  about  the  Maryland  budget  plan. 


Horace  E.  Flaok. 


Department  of  Legislative  Reference, 
Baltimore,  Md., 

February  5.  1917. 


BUDGET  AMENDMENT. 
CHAP.  159,  LAWS  OF  1916. 

An  Act  to  propose  an  amendment  to  Section  52  of  Article  III, 
title  Legislative  Department,  of  the  Constitution  of  this 
State,  regulating  the  making  of  appropriations  by  the  Gen- 
eral Assembly  of  Maryland  in  regular  session,  and  to  pro- 
vide for  the  submission  of  said  amendment  to  the  qualified 
voters  of  this  State  for  adoption  or  rejection. 

Section  1.  Be  it  enacted  by  the  General  Assembly  of  Mary- 
land, (three-fifths  of  all  the  members  of  each  of  the  two  houses 
concurring)  that  the  following  be  and  the  same  is  hereby  pro- 
posed as  an  amendment  to  Section  52  of  Article  III,  title  Legis- 
lative Department,  of  the  Constitution  of  this  State,  the  same, 
if  adopted  by  the  legally  qualified  voters  of  the  State,  as  herein 
provided,  to  become  Section  52  of  Article  III  of  the  Constitu- 
tion of  Maryland. 

Sec.  52.  The  General  Assembly  shall  not  appropriate  any 
money  out  of  the  Treasury  except  in  accordance  with  the  fol- 
lowing provisions: 

Sub-Section  A : 

Every  appropriation  bill  shall  be  either  a  Budget  Bill,  or  a 
Supplementary  Appropriation  Bill,  as  hereinafter  mentioned. 

Sub-Section  B: 

First.  Within  20  days  after  the  convening  of  the  General 
Assembly  (except  in  the  case  of  a  newly  elected  Governor,  and 
then  within  30  days  after  his  inauguration),  unless  such  time 
shall  be  extended  by  the  General  Assembly  for  the  session  at 
which  the  budget  is  to  be  submitted,  the  Governor  shall  submit 
to  the  General  Assemblv  two  budgets,  one  for  each  of  the  ensu- 
ing  fiscal  years.  Each  budget  shall  contain  a  complete  plan  of 
proposed  expenditures  and  estimated  revenues  for  the  particular 
fiscal  year  to  which  it  relates:  and  shall  show  the  estimated 
surplus  or  deficit  of  revenues  at  the  end  of  such  year.  A.ccom 
panying  each  budget  shall  he  a  statemenl  showing:  (1)  the 
revenues  and  expenditures  for  cadi  of  the  two  fiscal  years  next 
preceding:  (2)  the  current  assets,  liabilities,  reserves  and  sul- 
phas or  deficit  of  the  State ;  (3)  thedebtsand  funds  of  the  State ; 


2 

(4)  an  estimate  of  the  State's  financial  condition  as  of  the 
beginning  and  end  of  each  of  the  fiscal  years  covered  by  the  two 
budgets  above  provided;  (5)  any  explanation  the  Governor  may 
desire  to  make  as  to  the  important  features  of  any  budget  and 
any  suggestion  as  to  methods  for  the  reduction  or  increase  of 
the  State's  revenue. 

Second.  Each  budget  shall  be  divided  into  two  parts,  and 
the  first  part  shall  be  designated  "Governmental  Appropria- 
tions" and  shall  embrace  an  itemized  estimate  of  the  appropria- 
tions:  (1)  for  the  General  Assembly  as  certified  to  the  Gov- 
ernor in  the  manner  hereinafter  provided;  (2)  for  the  Execu- 
tive Department;  (3)  for  the  Judiciary  Department,  as  pro- 
vided by  law,  certified  to  the  Governor  by  the  Comptroller; 
(4)  to  pay  and  discharge  the  principal  and  interest  of  the  debt 
of  the  State  of  Maryland  in  conformity  with  Section  34  of 
Article  III  of  the  Constitution,  and  all  laws  enacted  in  pursu- 
ance thereof;  (5)  for  the  salaries  payable  by  the  State  under 
the  Constitution  and  laws  of  the  State;  (6)  for  the  establish- 
ment and  maintenance  throughout  the  State  of  a  thorough  and 
efficient  system  of  public  schools  in  conformity  with  Article 
VIII  of  the  Constitution  and  with  the  laws  of  the  State;  (7) 
for  such  other  purposes  as  are  set  forth  in  the  Constitution  of 
the  State. 

Third.  The  second  part  shall  be  designated  "General  Appro- 
priations," and  shall  include  all  other  estimates  of  appropria- 
tions. 

The  Governor  shall  deliver  to  the  presiding  officer  of  each 
house  the  budgets  and  a  bill  for  all  the  proposed  appropriations 
of  the  budgets  clearly  itemized  and  classified ;  and  the  presid- 
ing officer  of  each  house  shall  promptly  cause  said  bill  to  be 
introduced  therein,  and  such  bill  shall  be  known  as  the  "Budget 
Bill."  The  Governor  may,  before  final  action  thereon  by  the 
General  Assembly  amend  or  supplement  either  of  said  budgets 
to  correct  an  oversight  or  in  case  of  an  emergency,  with  the 
consent  of  the  General  Assembly  by  delivering  such  an  amend- 
ment or  supplement  to  the  presiding  officers  of  both  houses;  and 
such  amendment  or  supplement  shall  thereby  become  a  part  of 
said  budget  bill  as  an  addition  to  the  items  of  said  bill  or  as  a 
modification  of  or  a  substitute  for  any  item  of  said  bill  such 
amendment  or  supplement  may  effect. 

The  General  Assembly  shall  not  amend  the  budget  bill  so  as 
to  affeel  either  the  obligations  of  the  State  under  Section  ."> !  of 
Article  HI  of  the  Constitution,  or  the  provision  made  by  the 
laws  of  the  State  for  the  establishment  and  maintenance  of  a 


system  of  public  schools,  or  the  payment  of  any  salaries  required 
to  be  paid  by  the  State  of  Maryland  by  the  Constitution  thereof ; 
and  the  General  Assembly  may  amend  the  bill  by  increasing  or 
diminishing'  the  items  therein  relating  to  the  General  Assembly, 
and  by  increasing  the  items  therein  relating  to  the  judiciary, 
but  except  as  hereinbefore  specified,  may  not  alter  the  said  bill 
except  to  strike  out  or  reduce  items  therein,  provided,  however, 
that  the  salary  or  compensation  of  any  public  officer  shall  not 
be  decreased  during  his  term  of  office;  and  such  bill  when  and 
as  passed  by  both  houses  shall  be  a  law  immediately  without 
further  action  by  the  Governor. 

Fourth.  The  Governor  and  such  representatives  of  the  execu- 
tive departments,  boards,  officers  and  commissions  of  the  State 
expending  or  applying  for  State's  moneys,  as  have  been  desig- 
nated by  the  Governor  for  this  purpose,  shall  have  the  right. 
and  when  requested  by  either  house  of  the  Legislature,  it  shall 
be  their  duty  to  appear  and  be  heard  with  respect  to  any  budget 
bill  during  the  consideration  thereof,  and  to  answer  inquiries 
relative  thereto. 

Sub-Section  C:  Supplementary  Appropriation  Bilh: 

Wither  house  shall  consider  other  appropriations  until  the 
Budget  Bill  has  been  finally  acted  upon  by  both  houses,  and  no 
such  other  appropriation  shall  be  valid  except  in  accordance 
with  the  provisions  following:  (1)  Every  such  appropriation 
shall  be  embodied  in  a  separate  bill  limited  to  some  single  work, 
object  or  purpose  therein  stated  and  called  herein  a  Supple- 
mentary Appropriation  Bill;  (2)  Each  Supplementary  Appro- 
priation Bill  shall  provide  the  revenue  necessary  to  pay  the 
appropriation  thereby  made  by  a  tax,  direct  or  indirect,  to  be 
laid  and  collected  as  shall  be  directed  in  said  Bill;  (3)  No  Sup- 
plementary Appropriation  Bill  shall  become  a  law  unless  ii  be 
passed  in  each  house  by  a  vote  of  a  majority  of  the  whole  num- 
1"  r  of  the  members  elected;  mid  the  yeas  and  nays  recorded  on 
its  final  passage;  (4)  Each  Supplementary  Appropriation  Bill 
shall  be  presented  to  the  Governor  of  the  State  as  provided  in 
Section  17  of  Article  TT  of  the  Constitution  and  thereafter  all 
the  provisions  of  said  Section  shall  apply. 

Nothing  in  this  amendment  shall  be  construed  as  preventing 
the  Legislature  from  passing  at  any  time  in  accordance  with  the 
provisions  of  Section  28  of  Article  Til  of  the  Constitution  and 
subject  to  the  Governor's  power  of  approval  a-  provided  in 
Section  17  of  Article  TI  of  the  Constitution  mi  appropriation 
hill  to  provide  for  the  payment  of  any  obligation  of  the  State 


of  Maryland  within  the  protection  of  Section  10  of  Article  I  of 
the  Constitution  of  the  United  States. 

Sub-Section  D :  General  Provisions : 

First.  If  the  Budget  Bill  shall  not  have  been  finally  acted 
upon  by  the  Legislature  three  days  before  the  expiration  of  its 
regular  session,  the  Governor  may,  and  it  shall  be  his  duty  to 
issue  a  proclamation  extending  the  session  for  such  further 
period  as  may  in  his  judgment  be  necessary  for  the  passage  of 
such  Bill ;  but  no  other  matter  than  such  Bill  shall  be  considered 
during  such  extended  session  except  a  provision  for  the  cost 
thereof. 

Second.  The  Governor  for  the  purpose  of  making  up  his 
budgets  shall  have  the  power,  and  it  shall  be  his  duty,  to  require 
from  the  proper  State  officials,  including  herein  all  executive 
departments,  all  executive  and  administrative  offices,  bureaus, 
boards,  commissions  and  agencies  expending  or  supervising  the 
expenditure  of,  and  all  institutions  applying  for  State  moneys 
and  appropriations,  such  itemized  estimates  and  other  informa- 
tion, in  such  form  and  at  such  times  as  he  shall  direct.  The 
estimates  for  the  legislative  department,  certified  hj  the  pre- 
siding officer  of  each  house,  of  the  judiciary,  as  provided  by  law, 
certified  by  the  Comptroller,  and  for  the  public  schools,  as  pro- 
vided by  law,  shall  be  transmitted  to  the  Governor,  in  such  form 
and  at  such  times  as  he  shall  direct,  and  shall  be  included  in 
the  budget  without  revision. 

The  Governor  may  provide  for  public  hearings  on  all  esti- 
mates and  may  require  the  attendance  at  such  hearings  of  rep- 
resentatives of  all  agencies,  and  of  all  institutions  applying  for 
State  moneys.  After  such  public  hearings  he  may  in  his  dis- 
cretion revise  all  estimates  except  those  for  the  legislative  and 
judiciarv  departments,,  and  for  the  public  schools  as  provided  In- 
law. 

Third.  The  Legislature  may,  from  time  to  time,  enact  such 
laws,  not  inconsistent  with  this  Section,  as  may  be  necessnry 
and  proper  to  carry  out  its  provisions. 

Fourth.  In  the  event  of  any  inconsistency  between  any  of 
the  provisions  of  this  Section  and  any  of  the  other  provisions 
of  the  Constitution,  the  provisions  of  this  Section  shall  prevail. 
Hut  nothing  herein  shall  in  any  manner  affect  the  provisions  of 
Section  '■)  1  of  Article  TIT  of  the  Constitution  or  of  any  laws 
heretofore  or  hereafter  passed  in  pursuance  thereof,  or  be  con- 
strued ;i<  preventing  the  Governor  from  calling  extraordinary 
of  the  Legislature,  as  provided  by  Section  III  of  Article 


IT,  or  as  preventing  the  Legislature  at  such  extraordinary  ses- 
sions from  considering  any  emergency  appropriation  or  appro- 
priations. 

If  any  item  of  any  appropriation  bill  passed  under  the  provi- 
sions of  this  Section  shall  be  held  invalid  upon  any  ground,  such 
invaliditv  shall  not  affect  the  legalitv  of  the  Bill  or  of  anv  other 
item  of  such  Bill  or  Bills. 

Sec.  2.  And  be  it  enacted,  by  the  authority  aforesaid,  That 
the  said  foregoing  Section  hereby  proposed  as  an  amendment 
to  the  Constitution  shall  at  the  next  ensuing  general  election 
being  the  presidential  and  congressional  election,  to  be  held  on 
the  Tuesday  next  after  the  first  Monday  of  November,  nineteen 
hundred  and  sixteen,  be  submitted  to  the  legal  and  qualified 
voters  of  the  State  for  their  adoption  or  rejection  in  conformity 
with  the  directions  contained  in  Article  XIV  of  the  Constitu- 
tion of  this  State,  and  at  the  said  election  the  vote  on  said  pro- 
posed amendment  to  the  Constitution  shall  be  by  ballot,  and 
upon  each  ballot  there  shall  be  placed  the  following  synopsis  of 
said  amendment  under  the  caption  of 

CONSTITUTIONAL  AMENDMENT   PROVIDING 
FOR  A  BUDGET." 

"This  amendment  provides  that  the  Governor  shall  present 
to  the  Legislature  soon  after  it  is  convened  a  Budget  giving  a 
complete  plan  of  proposed  expenditures  and  estimated  revenues 
for  the  two  succeeding  fiscal  years  showing  clearly  any  surplus 
or  deficit  in  State  funds.  In  these  estimates  he  shall  make  pro- 
vision for  the  interest  and  sinking  funds  of  all  State  debts,  for 
all  salaries  as  fixed  by  law,  and  for  the  public  schools  as  fixed 
by  law.  With  regard  to  most  other  matters  he  may  revise  the 
estimates  presented  to  him  either  by  State  officers  or  State-aided 
institutions.  The  Legislature  may  not  increase  the  estimates 
presented  by  the  Governor  or  pass  any  additional  appropriation 
act  except  by  a  majority  vote  and  must  make  provision  by  tax 
for  such  increase  or  additional  appropriation.  The  Legislature 
may  not  alter  in  an  appropriation  ad  (lie  provision  made  by  law 
for  the  State  debt,  or  for  the  judiciary,  but  may  reduce  all 
other  items   in   the  (iovenmr's  estimates:"  and   the  words  "For 

the  Constitutional  Amendment"  and  "Against  the  Constitutional 
Amendment,"  as  now  provided  by  law.  and  immediately  after 
-aid  election  duo  returns  shall  be  made  to  the  Q-overnor  of  the 
vote  for  and  against  the  proposed  amendment,  and  further  pro- 
ceedings had  in  accordance  with  Article  XTY  of  the  Constitu- 
tion. 


u 


VOTE  ON  ABOVE  BUDGET  AMENDMENT  AT  THE 
ELECTION.  NOVEMBER  7,  1916. 

(  ounties.                                                  For.  A  gains! . 

Allegany 3,705  2,020 

Anne  Arundel 1,132  388 

Baltimore 0,7:57  4,131 

Calvert 399  164 

Caroline.- 396  144 

Carroll 1,499  730 

Cecil 877  245 

( Jharles 293  697 

Dorchester 697  352 

Frederick 2,510  1,527 

Garrett 511  965 

Harford 1,395  441 

Howard'. 663  328 

Kent.  .  .  .' 385  166 

Montgomery 1,654  275 

Prince  George's 1,489  369 

Queen  Anne's 990  196 

St,  Marv's 287  64 

Somerset 345  122 

Talbot 508  131 

Washington 2,635  1,574 

Wicomico 7  17  586 

Worcester 343  178 

Baltimore  City 44,281  21,307 

Totals 77,178  37.100 

Majority  for  Amendment,    t0,378. 


GOODNOW   REPORT. 

Executive  Department. 

Annapolis,  Mdv  January  28,  1916. 
To  the  President  of  the  Senate. 

Sir: 

I  transmit  herewith  a  copy  of  the  report  of  the  Commission 
on  Economy  and  Efficiency  on  the  Budget  System,  known  as 
the  Goodnow  Commission,  which  Commissipn  was  appointed  by 
the  late  Democratic  Convention.  Accompanying  this  report  is 
a  Bill,  prepared  by  the  Commission,  which,  in  its  opinion,  will 
carry  into  effect  its  recommendations.  I  feel  extremely  grati- 
fied at  the  very  able  report  submitted.  The  Commission  has 
devoted  much  time  and  work  in  the  performance  of  its  dele- 
gated duty. 

I  recommend  this  report  and  the  accompanying  Bill  to  your 
Honorable  Body  for  your  prompt  and  favorable  consideration. 

Respectfully, 

Emerson  C.  Harrington, 

Governor. 


Report  of  the  Commission  on  Economy  a\d  Efficiency  on 

a  Budget  System. 

(Md.  Senate  Journal,  Jam/an/  :.'S.   1916,  pp.   129  ISJf.) 

The  platform  of  the  party  to  which  this  Commission   owes 
its  existence  provided,  among  other  tilings,  as  follows: 

"We  pledge  the  adoption  of  what  is  known  as  the  budged  sys 
tern.     The  basis  of  the  system  shall  be  a  reporl  made  cither  by 
the  Governor  or  by  the  Board  of  Public.  Works  to  the  Legisla- 
ture of  the  estimated  income  of  the  State  during  the  succeeding 
two  years,  together  with  recommendations  as  to  the  appropria 
tions  or  expenditures  to  bo  made  for  all   purposes  during  the 
same  period  of  time.    The  Legislature  may  reduce  or  eliminate 
the  items  for  appropriations  <>r  expenditures  (excepl  when  this 
would  affect  the  State's  outstanding  obligations),  Imt  shall  not 
increase  the  same,  and  no  appropriations  shall  be  expended  for 
any  purpose  other  than   the  purpose  specified    in   the  budget. 
Proper  provision  shall  be  made  for  emergencies  or  contingen 
cies. 


"Until  the  budget  system  can  be  made  effective,  we  pledge 
the  Democratic  members  of  the  Legislature  to  keep  the  expenses 
of  the  State  within  the  income  of  the  State,  and  the  Governor 
to  exercise  his  veto  power  for  the  same  purpose. 

"In  connection  with  the  budget  system,  we  favor  the  adoption 
of  a  uniform  fiscal  year  for  all  State  officers  and  departments 
and  for  all  institutions  receiving  State  aid.  We  recommend 
that  all  continuing  appropriations  be  repealed  and  that  here- 
after all  appropriations  shall  be  included  in  two  general  appro- 
priation Bills — one  for  each  of  the  two  fiscal  years  intervening 
between  the  adjournment  of  one  Legislature  and  the  convening 
of  the  next. 

"The  Commission  created  by  the  first  plank  of  this  platform 
shall  be  charged  with  the  duty  of  devising  and  recommending  a 
detailed  plan  for  the  budget  system." 

It  will  be  noted  that  the  platform  provides  for  a  budget 
system  prepared  by  the  Governor  or  the  Board  of  Public  Works, 
the  items  of  which  can  be  reduced  or  eliminated,  but  not  in- 
creased, by  the  Legislature. 

This  limitation  is  fundamental  in  our  judgment  for  a  sound 
budget  system.  It  has  its  counterpart  in  the  budget  systems  of 
governments  most  advanced  in  their  fiscal  management.  It  also 
has  its  counterpart  in  the  budget  systems  of  a  number  of  Ameri- 
can municipalities.  As  has  been  pointed  out  by  the  Mayor  of 
Baltimore  City,  one-half  the  population  of  the  State  of  Mary- 
land has  become  accustomed  to  this  system  in  its  municipal  af- 
fairs and  would  not  think  for  a  moment  of  going  back  to  the  old 
system. 

Such  a  change,  however,  as  is  pledged  in  the  Democratic 
platform,  requires  a  constitutional  amendment  in  this  State. 

A  mere  statutory  provision  that  the  Governor  or  other  State 
officer  should  submit  to  the  Legislature  at  the  opening  of  its  ses- 
sion, estimates  of  the  revenues  and  expenditures  of  the  State 
cannot,  in  our  judgment,  produce  the  reform  in  State  finance 
which  is  demanded  by  the  people  and  voiced  in  the  Democrat  ic 
platform. 

A  provision  of  this  character  has  been,  indeed,  for  a  long 
t  ime  in  the  Maryland  Constitution.  This  is  Article  VI,  Section 
2,  which  Imposes  upon  the  Comptroller  the  duty  of  preparing 
and  reporting  "estimates  of  the  revenue  and  expenditures  of 
the  State."  'I'lils  provision  of  our  State  Constitution  has  not 
been  interpreted  as  vesting  the  Comptroller  with  the  power  to 
revise  the  estimates  submitted  to  him.     He  has.  as  a  rule,  sent 


9 

to  the  Legislature  estimates  of  expenditures  which  have  not,  at 
any  rate  in  recent  years,  controlled  the  action  of  the  Legislature 
in  making  the  appropriations. 

The  attempt  has  also  been  made  in  this  State,  through  the 
establishment  of  the  Board  of  State  Aid  and  Charities,  to  assist 
the  Legislature  in  its  appropriation  of  the  State  moneys  to  the 
many  State-aided  private  institutions.  The  Board  has  done  a 
great  deal  of  painstaking  and  valuable  work.  But  for  one  rea- 
son or  another,  the  Legislature  has  not  paid  sufficient  attention 
to  the  Board's  recommendations  to  justify  us  in  reaching  the 
conclusion  that  the  purpose  of  the  establishment  of  the  Board 
has  been  completely  realized.  It  is  still  true  that  the  estimates 
of  State  money  needed  by  the  State-aided  institutions  have  not 
been  subjected  to  an  effective  administrative  supervision — ef- 
fective at  any  rate  in  the  sense  that  the  recommendations  of  the 
Board  of  State  Aid  and  Charities  have  been  persuasive  in  con- 
trolling legislative  action. 

It  may,  therefore,  be  said  that  the  methods  already  resorted 
to  in  this  State  to  place  before  the  Legislature  a  complete  pic- 
ture of  the  State's  financial  resources  and  needs  have  not  been 
successful.  The  present  excess  of  expenditures  over  receipts, 
which  has  resulted  in  the  lame  accumulated  deficit,  is  ample 
proof  of  the  proposition  that  the  methods  of  making  appropria- 
tions now  in  force  are  defective. 

It  will   also  be  noted  that  the  party  platform  providing  for 
the  Commission  limited  its  choice  in  determining  the  responsi 
hi  lit  v    for   making   the    final    estimates   for   Submission   to   the 
Legislature,  to  the  Board  of  Public  Works  on  the  one  hand,  and 
to  the  Governor  on  the  other.      We  have  concluded   thai    this 
responsibility  should  be  placed  upon  the  Governor.     We  have 
felt  that  to  make  use  of  the  Board  of  Public  Works  as  a  Budgel 
Commission  would  have  the  disadvantage  of  dissipating  per 
sonal  responsibility   for   financial   propositions,  and   would  also 
run  the  risk  of  not  securing  party  responsibility.     For  it   is  by 
no  means  certain  under  the  condition-  which  exisl   in  the  State 
thai  the  political  partj   to  which  the  Governor  belonged  would 
be  in  control  also  of  the  Hoard  of  Public  Works.     If  such  lack 
of  political  harmony  should  exist,  the  Commission  believe  that 
a  budgel  Bystem  based  upon  the  Hoard  of  Public  Work-  would 
lose  much  iii  ellectivem 

The  most  difficull  problem  in  connection  with  the  formulation 

of  a    budged    plan   which   presented    itself  to  the  Commission   \V:lv 

the  determination  of  the  powers  of  the   Legislature  relative  to 
the  estimates  to  be  submitted  b\  the  Governor  to  the  Legisla 


10 

ture.  It  was  recognized  that  the  weakness  of  all  American 
financial  methods,  in  the  Congress  of  the  United  States,  as  well 
as  in  the  Legislatures  of  the  separate  States,  was  to  be  found 
in  the  practice  to  which  all  American  legislative  bodies  are 
addicted  of  adding  either  to  the  amounts  demanded  by  the 
administrative  departments,  or  to  the  items  for  which  appro- 
priations were  asked.  Under  the  Baltimore  City  Charter  the 
(  itv  Council  may  reduce  but  not  increase  the  estimates  adopted 
by  the  Board  of  Estimates. ,  This  plan  has  been  eminently  suc- 
cessful. 

The  Commission  feels,  however,  that  a  broader  latitude  should 
be  given  a  legislative  body  in  financial  matters  than  is  given  the 
City  Council  in  municipal  budget  making,  provided  the  latitude 
so  given  cannot  be  used  in  such  a  manner  as  to  produce  a  deficit 
in  the  State's  finances. 

In  this  decision  the  Commission  follows  the  suggestion  of  the 
Democratic  platform  that  proper  provision  be  made  for  emer- 
gencies or  contingencies. 

For  these  reasons  the  Commission  is  of  the  opinion  that  it  is 
advisable  to  give  the  Legislature  the  power  to  initiate  appro- 
priations for  objects  for  which  the  Governor  has  made  no  esti- 
mates. The  Commission  feels,  however,  that  it  is  necessary  to 
prevent  the  recurrence  of  deficits  in  the  finances  of  the  State, 
and  to  fix  the  responsibility  for  any  derangement  of  the  finan- 
cial plans  of  the  Governor.  It  has  accordingly  framed  the  pro- 
posed constitutional  amendment  in  such  a  way  as  to  permit  the 
Legislature  by  a  three-fifths  vote,  and  subject  to  the  usual  pro- 
visions with  regard  to  the  approval  of  the  Governor,  to  appro- 
priate money  for  a  purpose  not  included  in  the  Governor's  esti- 
mates, on  the  condition  that  provision  is  made  in  the  act  of 
appropriation  for  the  levy  of  a  tax  sufficient  in  amount  to  de- 
fray the  expenses  necessitated  by  such  act  of  appropriation. 

Apart  from  this  power  of  initiating  appropriations  the  Com- 
mission has  believed  that  the  example  offered  by  city  charters 
might  be  followed.  It  has  accordingly,  and  in  compliance  with 
tli(>  Democratic  platform,  provided  that  as  a  general  thing  the 
Legislature  may  not  alter  the  estimates  of  appropriations  sub- 
in  it  tod  by  the  Governor  except  to  strike  out  or  reduce  them,  and 
it  lias  confined  the  power  of  the  Legislature  at  a  regular  session 
to  initiate  an  appropriation  to  the  period  of  the  legislative  scs- 

o  subsequent  to  action  upon  the  estimates  submitted  by  the 
Governor. 


11 

It  is  further  to  be  noted  that  the  Commission  has  felt  that 
the  separation  of  the  three  great  departments  of  government, 
which  is  such  a  characteristic  feature  of  American  political 
organization,  makes  it  desirable  to  treat  the  estimates  for  the 
legislative  and  judiciary  departments  differently  from  the  other 
estimates.  The  estimates  for  the  Legislature  and  judiciary  are 
not  to  be  subject  to  the  revisory  powers  of  the  Governor.  Those 
for  the  Legislature  and  judiciary  are  to  be  certified  to  the  Gov- 
ernor, and  are  to  be  transmitted  by  him  without  revision  to  the 
Legislature.  The  estimates  of  the  judiciary  as  provided  by  law 
are  to  be  certified  by  the  Comptroller,  and  the  Legislature  may 
increase  them,  but  not  reduce  them.  The  effect  of  this  method 
of  treating  the  estimates  for  the  judiciary  will  be  that  no  reduc- 
tion in  the  provision  made  by  the  law  for  the  judiciary  may  be 
made  in  an  Appropriation  Act.  The  Legislature  may,  however, 
by  an  Act,  not  an  Appropriation  Act,  but  subject  to  the  limita- 
tions of  the  Constitution,  change  the  provision  made  by  law  for 
the  Courts.  In  case  it  should  do  so,  the  Comptroller  must,  the 
next  time  a  Budget  Bill  is  presented,  certify  the  estimates  for 
the  judiciary,  as  provided  by  the  law. 

The  estimates  for  the  Legislature  are  to  be  certified  by  the 
presiding  officer  of  each  House  for  transmission  without  revi- 
sion to  the  Legislature,  which  may  increase  or  reduce  them. 

In  order  to  carry  out  the  spirit  of  the  provision  of  the  plat- 
form which  seeks  to  protect  ''the  State's  outstanding  obliga- 
tions," and  in  order  to  preserve  as  far  as  possible  unchanged 
the  present  provisions  of  the  Constitution,  we  have  provided 
that  the  Governor  shall  in  his  estimates  make  provision  for  the 
State  debt,  for  salaries  payable  by  the  Constitution  and  laws  of 
the  State,  for  a  free  public  school  system,  ;is  provided  by  law. 
and  for  such  other  purposes  as  are  set  forth  in  the  Constitution. 
The  amendment  also  prevents  the  Legislature  from  amending 
the  Budget  Bill  so  as  to  affect  the  State  debt;  from  reducinir 
the  salaries  of  public  officers  during  their  term  of  office,  the  rule 
of  the  present  Constitution,  or  from  altering  the  estimates  for 
the  free  school  system  as  submitted  by  (lie  Governor. 

Finally,  the  constitutional  amendmenl  which  we  have  pro 
posed  provides  for  the  contingency  thai  the  Legislature  'lues  nut 
aet  upon  die  Budget  Bill  during  its  regular  session,  by  author 
izing  the  Governor  to  extend  thai  session.  In  case  lie  does  so, 
the  amendment  provides  that  the  Legislature  may  do1  consider 
•hiring  the  extended  session  any  other  matter  than  the  Budgel 

Bill.      We  have  also  specifically   provided   that   the  amendment 
proposed  shall  not  be  construed  as  preventing  the  Covernor  from 


12 

calling  extraordinary  sessions  of  the  Legislature,  as  now  pro- 
vided in  the  Constitution,  nor  as  preventing  the  Legislature  at 
such  extraordinary  sessions  from  considering  emergency  appro- 
priations. 

Our  thought  in  drafting  the  proposed  amendment  has  been  : 

First — To  impose  upon  the  Governor  the  sole  responsibility, 
within  the  limits  of  the  Constitution  and  the  provisions  of  exist- 
ing law,  of  presenting  to  the  Legislature  a  complete  and  compre- 
hensive statement  of  the  needs  and  resources  of  the  State  based 
upon : 

(a)  Estimates  made  by  those  applying  for  State  moneys; 

(b)  Evidence  brought  out  at  public  hearings  on  those  esti- 
mates ;  and 

(c)  Administrative  revision  by  the  Governor  of  all  estimates, 
except  those  for  the  Legislature  and  the  judiciary,  and  for  pur- 
poses for  which  provision  has  been  made  by  the  Constitution  or 
existing  law. 

Second — To  make  it  impossible  for  the  Legislature  so  to 
change  the  plans  proposed  by  the  Governor  as  to  produce  a 
deficit;  but 

Third — To  permit  the  Legislature  to  make  provision  for  any 
purpose  not  included  in  the  Governor's  plan  on  the  condition 
that  it  provide  also  for  the  revenue  which  the  accomplishmenl 
of  its  purpose  necessitates. 

Fourth — We  have  not  attempted  in  the  amendment  proposed 
to  deal  with  existing  continuing  appropriations.  We  have  felt 
that  it  would  be  improper  to  repeal  such  appropriations  by  con- 
stitutional provision.  Indeed,  so  far  as  a  continuing  appropria- 
tion is  a  part  of  a  contractual  obligation,  as  for  example,  a  con- 
tinuing appropriation  for  interest  and  sinking  fund  for  the 
State  debt;  a  repeal  of  such  an  appropriation  in  the  Slate  Con- 
stitution would  be  unavailing,  since  it  would  contravene  that 
provision  of  the  United  State-  Constitution  which  forbids  a 
State  to  pas-  any  law  impairing  the  obligation  of  a  contract. 

We  have,  however,  provided  in  the  amendment  submitted 
that  the  Legislature  may  from  time  to  time  enad  such  laws  not 
inconsistenl  with  the  amendmenl  as  may  he  necessary  ami 
proper  to  carry  out  any  of  its  provisions.  I'mler  this  clause 
the  Legislature  may  repeal  nil  continuing  appropriations  not 
of  a  contractual  character.  Such  a  policy  it  is  to  be  remem 
bered  is  approved  by  the  platform  of  the  party  under  the  in- 
structions of  which  tin-  Commission  has  been  working.     It  is. 


13 

however,  a  policy  which  would  bo  realized  rather  by  legislation 
than  by  constitutional  provision. 

( hit  of  abundant  caution  and  in  order  to  carry  out  the  pur- 
pose of  the  platform  to  protect  the  "State's  outstanding  obliga- 
tions," we  have  left  it  in  the  power  of  the  Legislature  to  pass 
at  any  time  and  in  the  usual  manner  an  Appropriation  Bill  for 
the  payment  of  all  the  State's  obligations  protected  by  the  pro- 
vision of  the  Constitution  of  the  United  States  forbidding  a 
State  to  pass  any  law  impairing  the  obligation  of  contracts. 

In  conclusion,  we  beg  to  emphasize  the  fact  that  in  the  opin- 
ion of  the  Commission  the  proposed  amendment  is  in  all  its 
details  in  exact  accordance  with  the  provisions  of  the  Demo- 
cratic  platform. 

Frank  J.  Goodnow,  Chairman. 

James  Alfred  PeakcEj 

JosErn  D.  Baker, 

B.  Howell  Geixwoid,  Jr., 

Philip  D.  Laird, 

William  M.  Maloy, 

F.  ISTeal  Parke. 


14 


EXPLANATION  OF  THE  BUDGET 
AMENDMENT. 

The  following  statement  from  "The  Baltimore  Sun'  of  Sept. 
4,  will  explain  the  purpose  of  the  articles  published  herewith 
through  the  courtesy  of  "The  Sun'' : 

Believing  that  the  budget  amendment,  which  will  be  voted 
upon  by  the  people  this  fall,  is  a  matter  of  the  most  far-reaching 
importance  to  the  State  of  Maryland,  and  fearing  that  in  the 
stress  of  the  national  campaign  it  may  be  overlooked  by  the 
voters,  The  Sun  some  time  ago  requested  the  members  of  the 
Economy  and  Efficiency  Commission,  which  framed  the  amend- 
ment after  weeks  of  study,  to  prepare  articles  setting  forth  the 
reasons  for  their  belief  that  it  should  be  made  a  part  of  the  State 
(  (institution. 

Below  is  the  first  of  these  articles — prepared  by  former  Judge 
James  Alfred  Pearce.  It  is  hardly  necessary  to  tell  who  Judge 
Pearce  is.  For  nearly  two  decades  he  was  an  honored  member 
of  the  Court  of  Appeals,  was  regarded  by  lawyers  as  "the  scholar 
of  the  bench,"  was  known  far  and  wide  as  thoroughly  saturated 
with  the  principles  of  American  institutions.  Articles  by  Dr. 
Goodnow,  Mr.  Laird  and  the  other  members  of  the  commission 
will  be  published,  one  each  week. 

NEED  OF   BUDGET. 

(Baltimore  Sun.  Sept.  4,  1916.) 
By  James  Alfred  Pearce. 

Since  the  passage  by  the  General  Assembly  of  the  act  propos 
ing  an  amendment  to  the  Constitution  of  Maryland  creating  ;i 
budget  system  nearly  five  months  have  passed,  and  during  thai 
period  public  attention  has  been  directed  almost  exclusively  to 
the  consideration  of  questions  involved  in  our  primaries  for 
United  States  Senator,  in  the  approaching  Presidential  cam- 
paign and  other  matters  of  national  import,  and  in  consequence 
there  lias  been  no  discussion  of  the  amendment  clearly  disclos- 
ing (lie  attitude  of  the  people  toward  it. 

I  feel,  therefore,  the  reasonableness  of  Ttte  Six's  suggestion 
that  the  members  of  the  Commission  appointed  by  the  last  Dem 
ocratic  State  Convention  to  prepare  tor  submission  a  budgel 
amendment,  anil  who  gave  their  best  thought  to  that  work  for 
more  than  four  months,  should,  each  lor  himself,  state  as  briefly 
as  he  may  the . considerations  which  governed   in    framing  the 

amendment,  and   which   they  believe  should  secure   its  adoption 


15 

In  this  day  of  manifold  and  ever  extending  governmental 
agencies,  no  one,  I  believe,  will  dispute  the  need  of  some  system 
of  State  appropriations  based  upon  the  budget  principle,  and, 
so  far  as  I  have  observed,  such  objection  as  lias  been  made  to 
that  proposed  in  this  State  is  expressed  in  the  vague  and  unsup- 
ported suggestion  that  it  is  "un-American  and  undemocratic," 
and  it  is  to  this  criticism  that  I  wish  to  speak. 

Developed  ix  England. 

The  germ  of  the  budget,  its  vital  principle,  is  inseparable 
from,  and  may  even  be  said  to  be  coeval  with,  civilized  govern- 
ment; at  least,  with  what  is  now  understood  by  constitutional 
government.  It  had  its  early  development  in  the  parliamentary 
practice  of  England,  our  mother  country,  from  which  we  have 
inherited  our  most  cherished  institutions,  and,  since  our  inde- 
pendence, have  adopted  so  many  of  our  more  modern  methods 
of  procedure,  and  that  would  be  a  rash  judgment  which  would 
declare  any  principle  "un-American"  because  it  was  practiced 
in  England,  or  "undemocratic"  because  England's  government 
is  a  constitutional  monarchy,  while  ours  is  a  constitutional 
republic. 

The  President  is  required  by  the  Constitution,  from  time  to 
time,  to  recommend  to  Congress  such  measures  as  he  shall  judge 
necessary  and  expedient,  thus  recognizing  his  initiative  in  logis 
lation. 

The  Constitution  of  Maryland  of  1851  in  the  light  of  experi- 
ence, required  the  Governor  to  recommend  to  the  Legislature, 
from  time  to  time,  such  measures  as  he  may  deem  necessary  and 
expedient.  The  two  succeeding  Constitutions  have  repeated 
this  mandate,  and  similar  provisions  are  now  found  in  the  Con- 
stitutions of  most  of  the  states  of  the  Union. 

During  Mr.  Taft's  administration  the  demand  for  public 
economy  was  so  insistent  that  lie  urged  upon  ( longress  provision 
for  "a  definite  budget,  a  concrete  and  well  considered  program 
of  work  to  be  financed."      During  this  discussion  Senator   Al 

drich  declared  that  such    a    program    would   save   tl ountry 

$300,000,000  a   year,   and   a   commission   of   inquiry   was  ap 
pointed,  which  made  an  elaborate  report,  and,  though  Congress 

has  not  acted  in  the  matter,  the  subject    is  a  live  one  in  the  pnh 
He  mind  and  has  the  earnest  advocacy  of  Mr.  Wilson  and  Secre 
tary  of  the  Treasury   McAdoo,  and  the  support   of  much   the 
larger  and  most  enlightened  and  influential   representatives  of 
the  press  of  the  country.     The  assertion  that  it  is  an  "nn  Ameri 
can"  idea  mav  be  therefore  dismissed  as  without   foundation. 


16 

Ls    \ot    "UNDEMOCRATIC." 

The  companion  criticism  (hat  it  is  "undemocratic"  is  equally 
vague,  though  it  is  more  likely  to  excite  the  hostility  or  rouse 
the  apprehension  of  careless  thinkers,  as  implying  the  invasion 
or  impairment  of  some  fundamental  principle  of  popular  gov- 
ernment. But  even  a  superficial  consideration  of  this  objection 
will  suffice  to  show  that  the  budget  idea  contravenes  no  funda- 
mental principle  of  popular  government;  that  it  destroys  or 
impairs  no  power  of  control  by  the  popular  branch  of  the  Gov- 
ernment, and  that  it  is,  essentially,  only  a  method  of  procedure 
in  the  application  of  one  of  the  most  jealously  guarded  princi- 
ples of  popular  government,  with  a  view  to  the  fuller  protection 
of  the  people  in  the  raising  and  disbursing  of  their  own  reve- 
nues. Tt  has  been  well  said  that  the  history  of  the  development 
of  representative  government  is  the  record  of  a  struggle  for 
popular  control  of  the  public  purse,  and  that  "there  is  no  prin- 
ciple upon  which  our  political  institutions  are  more  firmly  based 
than  that  the  public  finances,  both  with  respect  to  the  raising  of 
revenues  and  the  expenditure  of  state  funds,  should  be  regulated 
by  those  upon  whom  levies  are  to  be  made." 

A  chairman  of  the  Appropriations  Committee  of  Congress, 
as  the  result  of  long  study,  has  recently  said  in  reply  to  the  ob- 
jection that  "we  should  not  restrict  the  right  of  the  representa- 
tives of  the  people  to  loosen  up  the  pursestrings,  that  the  uni- 
versal condition  of  this  country  today  is  not  that  we  must  safe- 
guard the  rights  of  the  people  to  get  money  for  things.  The 
whole  curse  of  our  condition  is  thai  everybody  is  doing  his  ut- 
most to  act  it,  and  succeeds,  and  the  evil  to  be  corrected  is  the 
(wil  of  his  excessive  expenditure." 

1  )i.i  i  \ itio.x  is  Presented. 

I  adopt  as  accurate  and  scientific,  yet  simple,  the  definition 
of  a  budget  given  by  Frederick  A.  Cleveland,  director  of  the 
Bureau  of  ^Municipal  "Research  of  New  York  City,  viz:  "A 
plan  for  financing  an  enterprise  or  government  during  a  defi 
nite  period,  which  is  prepared  and  submitted  by  a  responsible 
executive  to  a  representative  body,  whose  approval  and  authori- 
zation are  necessary  before  the  plan  may  be  executed,"  and  1 
believe  the  amendment  to  be  submitted  to  tin  people  of  Mary- 
land al  the  November  election  conforms  to  this  definition  and 
is  free  from  violation  of  any  popular  right  or  of  any  true 
democratic  principles. 

An  examination  of  its  provisions  will  show  that  it  is  in  per- 
leei  accord  with  the  principle  that  the  public  purse  -hall  always 


17 

be  under  the  free  control  of  the  representatives  of  the  people, 
and  that  it  merely  provides  an  orderly  method  of  procedure  in 
the  application  of  this  principle.  The  amendment  as  a  whole 
provides  a  concrete  and  carefully  considered  plan  of  work  to  be 
financed  by  the  Sjtate,  leaving  no  element  or  item  to  hasty,  or 
haphazard  action.  This  plan  is  to  be  prepared  and  submitted 
by  the  Executive,  who  is  in  fact  responsible  for  the  execution 
of  the  laws,  and  who  is  held  responsible  by  the  people  for  safe 
and  wise  leadership.  It  is  impracticable  within  the  limits  of 
this  article  to  consider  in  detail  why  this  duty  is  committed  to 
the  Governor  rather  than  to  some  other  officer  or  board,  but  the 
reasons  were  convincing  to  every  member  of  the  commission,  and 
I  am  confident  will  be  found  so  by  the  great  majority  of  careful 
thinkers. 

The  plan  is  to  be  submitted  to  the  General  Assembly  within 
20  days  after  it  convenes,  in  order  to  give  ample  time  for  its 
consideration,  but  at  the  same  time  is  illustrated  the  care  with 
which  the  control  of  the  representative  branch  of  the  govern- 
ment is  preserved,  in  the  provision  that  the  Assembly  may  ex- 
tend this  time  if  it  is  deemed  necessary  or  desirable  to  give  fur- 
ther time  for  its  preparation. 

Governor  Acts  ox  Advk  e. 

The  plan  is  not  the  arbitrary  or  unaided  idea  of  the  Governor. 
He  is  required  to  act  upon  estimates  and  statements  from  all 
the  departments,  boards  and  agencies  in  the  State,  as  to  the 
anticipated  revenues  of  the  State  as  compared  with  those  of 
the  two  preceding  years,  and  as  to  the  reasonable  and  probable 
nee<U  of  such  departments,  boards,  etc.,  as  well  as  of  all  insti 
futions  applying  for  State  aid,  and  both  he  and  they  have  the 
righl  and  may  be  required,  whenever  requested  by  either  House, 
to  appear  and  answer  queries  relative  to  the  plan  ;  and  the  Go\ 
ernor  may  require  public  hearings  on  all  estimates  submitted  to 
him  before  acting  upon  them. 

Eacn  budged  is  to  be  in  two  parts  designated,  respectively, 
"governmental  appropriations"  and  "general  appropriation 
The  former  will  embrace  i  l  )  tho.se  for  the  General  iLSsembly, 
just  as  certified  to  the  Governor  by  the  presiding  officer  of  each 
house  ;  (  2  I  those  for  the  executive  departmenl  ;  |  3  i  those  for  the 
judiciary  as  provided  by  law  cei  tified  by  the  <  lomptroller  to  the 
Governor;  i  I  |  for  principal  and  intei*es1  of  the  public  debt  as 
required  by  the  Constitution;  (5)  for  salaries  as  provided  frj 
law;  (6)  for  maintenance  of  public  schools  as  commanded  l>\ 


18 

the  Constitution,  and  (7)  for  any  other  purposes  made  manda- 
tory by  the  Constitution. 

This  constitutes  a  segregation  of  items,  analogous  to  iixed  and 
overhead  charges,  and  results  in  determining  a  general  balance 
of  estimated  revenue  available  for  general  appropriations,  which 
embrace  all  those  not  designated  as  governmental  appropria- 
tions, and  which,  however  proper  and  necessary  under  the 
scheme  of  modern  government  prevailing  in  all  the  States  of 
the  Union,  are  not  strictly  speaking  part  of  the  machinery  of 
the  State,  and  which  for  that  very  reason  require  more  caution 
in  granting  them.  The  General  Assembly  may  amend  the  bud- 
get bill  by  increasing  or  decreasing  the  items  for  their  own  ex- 
penses and  by  increasing  the  items  for  the  judiciary,  but  may 
not  otherwise  alter  the  bill  except  to  strike  out  or  reduce  items 
therein,  provided  that  officers'  salaries  shall  not  thus  be  reduced 
during  their  term  of  office. 

Action  of  Assembly  Limited. 

In  acting  upon  the  General  Budget  bill,  as  it  may  be  prop- 
erly designated,  the  General  Assembly  may  not  increase  any 
item,  except  as  above  mentioned.  This  is  an  apparent,  but  only 
apparent,  restriction  upon  its  power  to  grant  appropriations. 
The  amendment  makes  specific  and  ample  provision  for  supple- 
mental appropriations  at  pleasure,  after  the  General  Budget  bill 
has  passed  both  Houses,  subject  only  to  the  requirement  that 
each  bill  for  supplemental  appropriations  shall  be  limited  to  a 
single  object  or  purpose  stated  therein;  that  it  shall  provide 
the  necessary  additional  revenue  by  a  tax  to  be  laid  as  directed 
in  the  bill,  and  that  it  shall  receive  in  each  House  a  majority 
of  all  the  members  elected  thereto.  Thus,  while  the  exercise  of 
the  right  to  make  appropriations  is  regulated  as  to  the  time  of 
its  exercise,  the  ultimate  power  is  undiminished. 

No  meritorious  object  which  would  have  received  the  ap- 
proval of  the  Assembly,  if  included  in  the  general  bill,  need  ever 
fail  when  presented  in  a  supplemental  bill;  while  many  an 
unwise  or  excessive  appropriation,  which  would  have  slipped 
through  under  the  present  mode  of  procedure,  would  be  rele 
gated  to  the  disenrd. 

This  provision,  the  members  of  the  Commission  felt  to  be  a 
most  valuable  feature  of  the  amendment,  fully  meeting  and  dis 
arming  hostile  criticism  as  respects  any  impairment  of  the 
I  lower  of  the  Legislative  branch,  and  strongly  eommending  the 
whole  amendment  to  every  taxpayer  and  to  every  eitizcn  jealous 
of  the  good  nnme  and  credit  of  the  State. 


19 


GAIN  FOR  STATE  IN  BUDGET  PLAN. 

(Baltimore  Sun,  Sept,  11,  1916.) 
By  PHiLir  D.  Laird. 

Member  of  the  Public  Service  Commission  and  Speaker  of  the 
/louse  of  Delegates  in  the  last' Legislature.) 

Among  the  matters  to  be  passed  upon  by  the  citizens  of  Mary- 
land at  the  next  election  is  the  budget  system  which  the  Legis- 
lature of  1916  submitted,  in  the  form  of  a  Constitutional  amend- 
ment, for  approval  or  rejection  by  the  people.  So  far  as  the 
Stat<  is  concerned,  no  more  important  measure,  when  the  prac- 
tical results  aimed  at  are  considered,  has  ever  been  presented 
for  the  final  determination  of  the  voter ;  and  the  issues  of  a 
Presidential  election,  nation-wide  and  serious  as  they  are  con- 
reded  to  be.  should  not  be  permitted  to  overshadow  the  vital  local 
interest-  involved  in  the  establishment  of  sound  principles  and 
methods  to  safeguard  the  financial  integrity  of  the  State  and 
lighten  the  burden  of  taxation.  Indeed,  it  would  seem  to  be 
short-sighted  patriotism  to  show  indifference  to  any  one  of  the 
elements  which  combine  to  produce  desired  results,  and  no  State 
can  properly  discharge  its  duty  to  the  Union  unless  its  own 
affairs  are  well  managed  and  its  resources  conserved  to  meet 
contingencies  as  they  arise,  ;is  well  as  to  meet  its  daily  recur- 
ring obligations. 

In  discussing  the  budget  amendment  it  is  essential  to  keep  in 
mind  (lie  conditions  and  practices  which   il   is  designed  to  cor 
reet.     For  many  years  loose  methods  of  appropriation  of  public 
funds  prevailed   in  the  General   Assembly,  without   regard   to 
probable   revenue   and.   apparently,    without  knowledge   of   its 
30urces  under  existing  law-.     The  practice  has  grown  up  and 
become  fixed  of  applying  for  State  aid  for  all  sorts  of  local  pur- 
poses which   should  have   been   provided    for  by   counties  and 
municipalities,  and  delegations  combined   l<>  carry  their  meas 
lires  through   under  the  mistaken   idea   that,  as  the  counties  and 
cities  made  no  direct  levies  for  the  object,  they  were  relieved 
from  the  resulting  taxation.     This  condition  was  taken  advau 
tage  of  l,v  designing  men  who  possessed  political   influence,  to 
gecure  support  for  measures  in  which  they  had  a  special  inter 

est.      These  men   would   threaten   the  detent   -if  local    hills  unless 


20 

their  authors  agreed  to  vote  for  the  bills  which  the  politicians 
desired  to  have  passed,  and  the  fear  of  unpopularity  at  home. 
in  case  the  local  measure  failed,  was  usually  strong  enough  to 
influence  delegations  to  accept  the  conditions.  This  log-rolling 
process  went  on  in  the  face  of  warnings  from  the  fiscal  officers 
of  the  State  and  the  press,  and  each  party,  when  in  control,  acted 
with  the  same  disregard  of  consequences.  But  in  fairness  H 
should  be  said  that  much  of  the  extravagance  of  later  years  thai 
produced  the  deficit  of  L915  and  1916  was  in  response  to  popu- 
lar demand  for  facilities  and  to  the  constantly  increasing  num- 
ber of  schemes  for  "uplift,"  whose  promoters  swarmed  in  the 
State  House  appealing  for  money.  Furthermore,  in  forming 
our  judgment  of  the  Legislature,  it  would  be  unfair  to  overlook 
the  fact  that,  while  warnings  had  been  sounded,  comprehensive 
statements  of  fiscal  affairs,  such  as  would  be  really  informing, 
were  not  furnished  to  the  members,  and  they  were  obliged  to 
act,  generally  in  the  closing  days  of  the  session,  upon  reports  of 
committees  which  contained  no  comment,  or  upon  the  hasty 
explanations  of  overworked  chairmen.  These  untoward  condi- 
tions were  prominently  in  evidence  in  the  last  session  of  the 
Legislature.  It  was  necessary  to  make  provision  for  a  large 
deficit,  and  to  meet  the  increased  expenditure  which  this  and 
other  causes  occasioned,  new  sources  of  revenue  had  to  be  found 
and  the  measure  of  taxation  worked  out  and  adjusted  to  pro- 
duce the  best  and  fairest  results.  It  was  impossible  to  formu- 
late the  appropriation  bills  until  the  approximate  revenue  was 
ascertained,  and  it  was  not  until  the  very  last  day  of  the  session 
that  the  more  important  appropriation  bills  were  introduced 
and  passed  under  suspension  of  the  rules. 

Too  many  dangers  lurk  in  such  a  situation  to  permit  its  recur- 
rence in  the  legislative  experience  of  the  State.  The  remedy 
lies  in  a  rule  which  will  be  binding  upon  the  General  Assembly 
and  which  una  fan  tees  investigation  of  the  public  needs  and 
resources,  and  forethought  in  the  efforl  I"  promote  the  public 
welfare,  before  the  Legislature  is  called  upon  to  act.  The  ad- 
vantage of  this  to  the  responsible  legislator  and  to  the  whole 
body  of  citizens  is  so  obvious  thai  argument  to  prove  it  would 
seem  to  be  a  waste  of  time.  The  legislator,  T  am  sure,  would 
welcome  it,  and  the  citizen  would  rejoice  to  know  in  advance 
what  was  proposed  and  be  in  a  position  to  make  his  views  known 
to  bis   representatives.     A   distinct    advance  in   administrative 

orm  will  be  made  when  the  fiscal  scheme  of  the  ensuing  two 
years  is  laid  bare  in  the  early  days  of  the  session  of  the  Legis- 
lature, and  subjected  to  the  scrutiny  of  the  press  and  the  peo- 


21 

pie — something  that  has  been  missed  in  all  these  years — and 
the  citizens  are  brought  into  intelligent  and  intimate  touch  with 
affairs  of  State  that  affect  them  in  a  thousand  ways. 

The  object  of  the  budget  system  is  to  abolish  the  abuses 
above  referred  to  and  others  that  might  be  named,  and  estab- 
lish in  their  place  an  orderly,  systematic,  detailed  statement  of 
the  financial  condition  of  the  State,  accompanied  by  recom- 
mendations, in  the  form  of  bills,  for  the  appropriations  for  the 
ensuing  two  fiscal  years  and  for  raising  the  revenues  to  pay 
them.  Tin's  could  have  been  accomplished  by  a  statute,  but 
after  a  full  discussion  and  serious  consideration,  the  Commis- 
sion reached  the  conclusion  that  the  purpose  would  be  more 
effectively  carried  out  by  a  constitutional  amendment.  A  stat- 
ute would  have  been  binding  so  long  as  it  remained  unrepealed, 
but  it  is  within  the  range  of  possibility — in  some  conditions,  of 
probability — that  the  influences  friendly  to  the  old  and  easy- 
going methods  might  be  strong  enough  to  effect  the  repeal  of 
the  law  before  its  merits  could  be  tested  by  time,  or  to  so 
modify  it  as  to  destroy  its  value.  A  constitutional  provision. 
however,  would  have  the  merit  of  stability;  and  the  approval  of 
the  people,  expressed  at  a  general  election,  would  have  the  effect 
of  stimulating  those  charged  with  the  preparation  of  the  budgel 
to  unusual  care  in  their  work,  and  those  responsible  for  its  adop- 

n  to  unusual  care  in  analyzing  and  acting  upon  it. 

The  admirable  article  by  Judge  Pearce,  in  The  Sun  of  Sep- 
tember 4.  sets  forth  the  reasons  which  influenced  the  Commis 
sion  in  committing  the  preparation  of  the  budgel  to  the  Gov- 
i  rnor,  and  discusses  with  force  and  precision  the  objections  to 
that  provision.  He  also  disposes  of  the  contention  thai  (lie 
aim  ndinenl  is  aun-American"  and  deprives  the  Legislature  of 
powers  and  prerogatives  which  properly  belong  to  it.  Probably 
a  discussion  of  those  items  from  a  differenl  standpoinl  would 
be  worth  while  and  it  may  he  undertaken  at  a  later  date.  But 
the  presenl  purpose  is  to  indicate  the  lines  along  which  the  ('em 
mission    worked    in    the   effort    to    produce    practical    results    thai 

must  necessarily  prove  beneficial.  The  space  at  command  does 
not  permit,  at  this  time,  elaborat(  discussion  of  details,  and  it 
is  sufficient  to  <;,\  that  the  objeel  was  to  establish  in  public 
affairs  the  same  care,  intelligence  and  mastery  of  details  that 
has  enabled  men  in  comm<  rcial  pursuits  to  overcome  difficulties 
;oid  achieve  splendid  triumphs  in  the  business  world. 

Tin  re  is  not  one  rule  of  economy  and  business  oversighl  and 
attention  lor  the  individual  or  private  corporation  and  another 

rule    for   the    State.      The   difficulties   of   the   State    are    in    some 


22 

respects  more  numerous  and  irritating,  because  conflicting  local 
interests  and  invisible  political  influences  are  constantly  at 
work;  but  the  fundamentals  of  efficient  management  are  the 
same  in  both  cases.  In  its  essence,  the  budget  system  is  simply 
an  established  method  of  management  of  public  fiscal  affairs 
which  shall  be  open  and  aboveboard  to  all  who  have  an  interest. 
As  it  is  viewed  by  those  who  have  given  special  study  to  the 
subject,  a  distinct  advantage  will  be  gained  by  compelling  the 
Governor  to  prepare  the  budget,  because  the  work  will  give  him 
first-hand  information  of  matters  over  which  his  executive  func- 
tions properly  extend,  and  equip  him  to  adequately  fulfill  the 
responsibilities  of  his  trust.  The  Constitution  now  compels  him 
to  recommend  to  the  General  Assembly  such  measures  as  he 
deems  wise  and  expedient  in  the  public  interest.  The  proposed 
amendment  only  requires  that  as  to  certain  things  he  shall  fur- 
nish the  details  which  will  enable  the  Assembly  to  act  intelli- 
gently and  promptly.  In  this,  it  is  submitted,  there  is  no  cause 
for  alarm. 

Those  countries  which  have  adopted  the  budget  system — con- 
fessedly the  best  managed,  financially,  in  the  world — would  not 
consent  to  a  change,  and  among  them  no  personal  liberties  of  the 
people,  and  no  fundamental  parliamentary  rights  have  been  cur- 
tailed or  endangered  by  it.  There  is  nothing  peculiar  in  our 
institutions,  as  will  be  shown  later,  which  makes  them  amen- 
able to  assault  through  the  adoption  of  sound  business  methods 
which  will  conserve  the  resources  of  the  State,  ultimately  close 
numerous  channels  of  extravagance  and  waste,  and  remove  the 
opportunities  for  sinister  and  demoralizing  practices. 


23 


HUMAN  INTEREST  SIDE  OF  THE  BUDGET  QUESTION. 

{Baltimore  Sun,  Sept.  18,  191G.) 
By  William  Milnes  Maloy. 

{Former  State  Senator.) 

If  the  Maryland  legislator  served  his  State  as  well  as  he 
serves  his  county  or  district,  a  budget  system  would  not  be 
necessary  in  Maryland.  This  is  not  a  reflection  upon  the  legis- 
lators of  Maryland  in  particular,  for,  regretfully,  it  must  be 
said  that  most  of  the  members  of  Parliament,  of  Congress  and 
of  every  State  Legislature  in  the  Union  are  more  mindful  of 
the  public  interests  of  the  localities  they  respectively  represent 
than  of  the  general  welfare  of  the  nation  or  State. 

The  division  of  Maryland  by  a  great  body  of  water  into  an 
Eastern  and  a  Western  Shore,  embracing  a  diversity  of  moun- 
tain  slopes,  low-lying  plateaus,  interrange  valleys  and  coastal 
plains,  exhibiting  every  variety  of  soil  and  crops,  aiid  the  great 
aggregation  of  half  the  population  of  the  State  in  an  industrial 
and  seaport  city,  with  the  other  half  scattered  between  trading 
villages  and  farming  communities,  present  to  the  General  As- 
sembly, charged  with  the  dutv  of  choosing  the  channels  into 
which  to  divert  the  quickening  stream  of  public  appropriations. 
a  perplexing  confusion  of  interests,  activities  and  needs,  made 
still  more  complex  by  our  long-established  custom  of  distrib- 
uting State  funds  among  private  institutions,  doing  or  claiming 
to  do  public  work. 

Every  hospital,  asylum  and  home  singles  out  a  forceful  mem 
betr  to  make  the  appropriation   for  that    particular   institution 
his  chief  aim  at  Annapolis.     Every  State-aided  college  seeks  an 
alumnus  member  to  champion,  the   cause   of  his    alma    mater 
with   the  zeal  of  a  Daniel  Webster   pleading    for    Dartmouth. 
Every  county  leader  holding  office  as  chief  of  a  Slate  depart 
ment,  interests  his  delegation  in  tin1  allotment    I'm-  thai   branch 
of  the  administrative  service  which  his  close  range  vision  mag 
nifies  to  be  the  very  keystone  of  the  governmental  arch.     As  a 
side  Interest  almost  every  member  has  a  county  road  at  borne 

which  he  regards  as   the  most    important    highway    in    the  State 
and    wants    improved    and    maintained    as    a    part    of    the    State 

Roads  System.     Constituents  and   sponsors  of  the  Senator  or 


24 

Delegate  too  often  judge  his  record  by  the  result  of  hi*s  efforts 
to  secure  the  coveted  appropriation.  Throughout  the  session 
these  ultimate  aims  influence  votes  and  alignments  on  men  and 
measures.  Messrs.  Campbell,  Gorman,  Benson,  Price  and  Wil- 
kinson, during  years  of  service  at  Annapolis,  have  struggled  to 
restrict  the  appropriations  to  State-wide  projects  in  commen- 
surate amounts,  but  have  found  it  impossible  to  contend  against 
the  combinations  effected  to  compel  favorable  reports  on  local 
appropriations  and  on  additions  to  the  regular  bills  which  have 
resulted  in  making  the  total  expenditures  exceed  the  highest 
estimate  of  State  revenues. 

These  over-appropriations  have  been  going  on  for  years,  but 
somehow  or  other  the  State  Treasury  stood  the  strain  until  last 
year,  when  the  Comptroller  announced  that  the  appropriations 
mado  by  the  Legislature  of  1914  could  not  be  met.  Then  fol- 
lowed the  report  of  Mr.  Harvey  S.  Chase,  who  had  been  retained 
to  examine  and  report  on  the  State's  finances,  and  it  was  dis- 
closed that  on  January  1,  1916,  the  Treasury  of  Maryland  faced 
a  deficit  of  one  and  one-quarter  millions,  representing  not  mere 
gratuities  to  private  institutions  only,  but  unpaid  appropria- 
tions for  the  maintenance  of  such  State  agencies  as  the  Tuber- 
culosis Sanatorium,  Springfield,  Spring  drove  and  Crownsville 
Asylums  for  the  Insane,  the  Rosewood  School  for  Defectives, 
the  Workshop  for  the  Blind,  the  House  of  Correction,  the  ('on- 
federate  Home  at  Pikesville,  and  many  others.  The  total  later 
grew  to  $2,000,000,  which  was  paid  by  the  proceeds  of  a  bond 
issue,  tn  meet  the  principal  and  interest  of  which,  the  people  of 
Maryland  will  be  taxed  for  the  next  10  years.  Thus,  for  the 
first  time  in  75  years,  and  perhaps  for  the  first  time  in  the  his- 
tory of  the  State,  "Maryland  is  paying  current  expenses  out  of  a 
bond  issue. 

In  attempting  to  shift  the  blame,  certain  legislators  claimed 
thai  the  ( rovei  nor  should  have  totaled  the  mass  of  omnibus,  gov- 
ernmental, special  and  local  appropriation  bills,  and  have  vetoed 
the  excess  sum.  The  friends  of  the  Governor  urged  with  justice 
that  as  the  Constitution  reposed  the  duty  of  appropriating  pub- 
lic moneys  and  raising  the  necessary  revenue  in  the  Legislature, 
it  was  not  fair  to  expect  the  Executive  to  use  bis  veto  to  save 
the  GreneraJ  Assembly  from  the  political  consequences  of  its 
misdeeds,  especially  when  some  of  the  bills  appeared  to  have 
been  passed  with  full  expectation  thai  the  Governor  would  have 
to  veto  them.  Other  legislators  found  fault  with  the  Comp- 
troller, and  when  thai  official's  friends  pointed  to  bis  report  em 
bodying  a  technical  performance  of  the  Comptroller's  duties  of 


25 

estimating  revenues  and  warning  against  extravagance,  the  law- 
makers replied  that  the  report  was  not  intelligible  anyhow ;  that 
the  warnings  against  extravagance  had  been  couched  in  the 
same  language  for  a  generation  by  successive  Comptrollers, 
and  as  each  Legislature  had  disregarded  them,  so  had  the  Legis- 
lature of  1914.  Here  the  attempt  to  shirk  the  responsibility 
still  remains — the  Governor,  Comptroller  and  Assembly  (as  a 
newspaper  cartoonist  represented  it)  standing  in  a  ring,  each 
pointing  an  accusing  finger  at  the  other,  with  no  end  to  the 
circle  of  censure. 

The  truth  of  the  matter  is  that  the  system  is  faulty  in  that  it 
supposes  the  Legislature  to  possess  the  knowledge,  have  the  time 
and  be  the  place  to  formulate  a  State  financial  scheme  with  a 
finely  adjusted  and  balanced  schedule  of  revenues  and  appro- 
priations. After  an  experience  of  three  sessions  as  a  member 
and  another  session  as  an  officer  of  the  General  Assembly,  I 
say  without  any  reservation  that  the  legislators  are  just  as  hon- 
est and  conscientious  in  the  discharge  of  their  duties  as  are  busi- 
ness and  professional  men  in  attending  to  the  matters  intrusted 
to  them,  but  it  is  only  too  true  that  the  average  member  repre- 
sents  his  county-  only,  cannot  see  or  understand  the  State  as  a 
whole,  and  never  does  acquire  an  adequate  understanding  of  the 
State's  finances.  The  Governor,  as  the  officer  who  does  repre- 
sent and  understand  the  entire  State,  and  is  accountable  to  all 
the  pc?ople,  should  be  charged  with  the  task  of  framing  financial 
policies,  determining  the  avenues  of  State  expenditure,  and 
especially  so  as  he  has  to  carry  out  the  provisions  of  the  en- 
acted measures.  The  wholesome  check  upon  this  power  is  thai 
the  Legislature  must  approve  the  plans,  policies  and  recom- 
mendations of  the  Governor. 

Before  condemning  this  method  of  placing  the  responsibility 
on  the  Chief  Executive  of  the  State,  it  should  be  remembered 
that  this  is  the  last  resort  of  those  who  have  sought  a  remedy 
for  the  present  unsatisfactory  condition.  Means  d\'  improve 
mi  nt  and  correction  by  internal  changes  have  been  tried  I  ,\ 
earnesl  legislators  seeking  a  remedy.  The  legislative  committee 
system  lias  been  condemned  on  the  ground  that  a  small  body 
should  not  control  the  appropriations.  The  committees  have 
been  enlarged  and  even  doubled,  with  a  corresponding  increase 
in  the  appropriations  as  a  result.  As  another  expedient,  the 
money  bills  have  been  distributed  among  several  committees, 
with  the  consequence,  as  in  Congress,  where  it  was  tried,  thai 
the  appropriations  have  grown  to  a  billion  dollars,  and  more 
recently  t'>  nearly  two  billion  dollars.     To  correcl   the  trouble 


26 

constitutional  amendments  have  been  adopted  in  many  States, 
including-  Maryland,  giving  the  Governor  the  right  to  veto  indi- 
vidual money  items,  and  the  Executive  has  usurped  the  further 
power  of  reducing  items.  The  creation  of  advisory  bodies,  such 
as  the  Maryland  Board  of  State  Aid  and  Charities,  has  made 
but  little  improvement.  The  performance  by  the  Governor  and 
the  Comptroller  of  their  constitutional  duties  of  informing  the 
Legislature  of  the  condition  of  the  State,  with  recommendations 
concerning  the  increase  of  revenues  and  curtailment  of  expendi- 
tures, has  produced  no  appreciable  betterment.  Maryland  has 
tried  all  previous  expedients  and  has  a  $2,000,000  over-appro- 
priation to  meet.  The  real  remedy  is  to  place  the  responsibility 
on  the  Governor,  and  to  impose  the  duty  in  such  a  way  that  he 
cannot  evade  it.  Let  him  get  such  assistance  as  he  may  see  fit, 
but  the  responsibility  must  be  his,  and  for  the  performance  of 
his  duty  he  is  accountable  to  the  people  of  the  State.  This  fea- 
ture of  executive  initiative  of  and  responsibility  for  financial 
policies,  as  contained  in  the  Maryland  budget  amendment,  has 
the  indorsement  of  President  Wilson,  former  President  Taft, 
Dr.  Goodnow  and  Dr.  Cleveland,  and  of  many  experienced  mem- 
bers of  Congress. 

In  the  discussion  of  the  budget  amendment  it  must  not  be  for- 
gotten that  the  plan  of  raising  revenue  and  the  schedules  of 
appropriations  originated  by  the  Governor  require  legislative 
approval.  The  Legislature  may  strike  out  or  reduce  items  of 
general  appropriation.  It  may  make  supplementary  appropria- 
tions provided  it  raises  the  revenue  by  taxation,  which  is  an 
effective  check  against  local  appropriations  and  the  creation  of 
a  deficit.  Congressman  Fitzgerald,  for  years  chairman  of  the 
Committee  on  Appropriations  of  the  United  States  House  of 
Representatives,  goes  so  far  as  to  suggest  depriving  the  indi- 
vidual member  of  the  right  to  initiate  appropriation  measures. 
The  Maryland  budget  plan  docs  not  go  to  this  extreme,  but  it 
does  provide  that  if  a  member  introduce  and  the  Legislature 
pass  a  supplementary  appropriation  bill  the  necessary  revenue 
must  be  raised  then  and  there  by  direct  or  indirect  taxation. 

I  hope  there  will  be  no  attempt  to  argue  that  the  budget  plan 
gives  the  Governor  too  much  power.  For  many  years  the 
Maryland  Legislature  has  passed  its  appropriation  bills  in  the 
last  hours  of  the  final  days  of  the  session,  then  adjourned  and 
left  the  Governor  with  absolute  power  to  veto  any  or  all  appro- 
priations, and  in  recent  years  to  decrease  the  items  at  will.  The 
Executive  has  refused  to  exercise  this  power  to  prevent  a  dnficit, 
claiming  that  the  duty  is  imposed  on  the  Legislature.     The  pro- 


27 

posed  amendment  gives  the  Governor  the  power  before,  instead 
of  after,  action  by  the  Legislature,  and  locates  without  possibil- 
ity of  evasion,  the  responsibility  for  devising  the  fiscal  arrange- 
ments of  the  State,  which  responsibility  now  is  distributed 
among  129  men,  each  politically  accountable  only  to  the  voters 
of  a  single  county  or  district.  No  one  familiar  with  legislative 
methods  in  Maryland  can  truthfully  say  that  there  is  anything 
revolutionary  in  this  part  of  the  budget  amendment. 

Another  important  feature  of  the  budget  amendment  is  the 
right  which  it  gives  to  the  Executive  to  appear  and  defend  his 
financial  recommendations.  That  this  is  not  revolutionary  is 
shown  by  a  learned  professor  in  one  of  our  leading  universities 
who  in  a  recent  article  contends  that  this  was  the  plan  that  the 
frarners  of  the  United  States  and  State  constitutions  had  in 
mind,  but  that  in  practice  we  have  widely  departed  from  it. 
That  a  return  to  the  original  procedure  or  the  adoption  of  the 
innovation  is  necessary  the  leading  authorities  and  students  of 
our  governmental  system  all  agree.  Our  own  experience  in 
Maryland  shows  how  necessary  it  is  for  the  Executive  to  be 
able  to  enter  the  legislative  councils  and  face  those  combatting 
his  financial  policies  in  order  that  the  people  may  learn  the 
merits  of  the  controversy.  More  than  one  Governor  in  Mary- 
land has  bartered  State  offices  for  progressive  financial  legisla- 
tion. At  each  session  for  years  an  astute  old  county  leader  ha? 
caused  his  delegation  to  revolt  and  vote  against  administration 
measures  until  he  has  obtained  the  political  pelf  that  he  de- 
mands. A  Governor  who  has  arrayed  against  him  the  corrupt 
among  the  political  bosses  frequently  finds  the  chairmen  of  com- 
mittees picked  from  among  the  opposing  faction  and  is  power- 
less to  advance  his  plana  until  he  makes  terms  with  his  enemies. 
The  right  to  come  before  the  Legislature  in  person  and  in  the 
white  light  of  publicity  explain  his  plans  and  expose  the  motives 
of  his  opponents  will  be  a  tower  of  strength  to  an  honest  execu- 
tive and  will  enable  him  successfully  to  fight  the  "invisible 
government".  With  this  right  the  Budget  Amendment  endows 
the  Governor  of  Maryland. 

It  has  been  advanced  that  the  adoption  of  the  budgel  system 
would  drain  the  Legislature  of  its  political  power  and  reduce 
that  body  to  the  condition  of  City  Councils  since  the  inaugura 
tion  of  boards  of  estimates.  This  is  far  from  true.  It  would 
make  the  General  Assembly  a  forum  of  debate  and  delibera 
t.ion — its  proper  sphere — which  it  is 'far  from  being  today. 
When  the  Governor's  bills  shall  have  been  introduced  early  in 
the  session,    as   required,    the   proceedings   will    be    well    worth 


28 

attending.  For  instance,  should  the  Governor  recommend  an 
appropriation  to  bridge  Sinepuxent  Bay,  on  the  Eastern  Shore, 
the  interrogatories  put  to  the  Executive  by  the  Western  Mary- 
land and  Baltimore  City  members  would  be  enlightening.  Were 
the  Governor  to  advocate  the  donation  of  money  from  the  State 
Treasury  to  erect  a  large  building  for  the  Methodist  College  at 
Westminster,  it  would  be  refreshing  to  hear  from  the  member 
from  the  Tenth  Ward  of  Baltimore  City.  Did  the  Governor  but 
suggest  the  construction  of  a  road  in  Anne  Arundel  County 
paralleling  another  completed  State  road  at  no  point  over  one 
and  three-quarter  miles  apart,  and  over  the  vigorous  protest  of 
the  State  Roads  Commission,  it  would  be  entertaining  to  hear 
from  the  Delegates  from  Washington  County,  that  great  tax- 
paying  county  of  Western  Maryland,  with  but  one  State  road 
within  its  broad  confines.  Let  the  Executive's  recommenda- 
tions include  such  a  strange  provision  as  an  appropriation  for 
the  State  to  buy  200  copies  of  that  law  book,  "Contest  of  Wills," 
the  remarks  of  the  members  from  frugal  Frederick  would  be 
plain  and  to  the  point.  And  yet  bills  containing  these  items 
have  been  passed  in  the  last  days  of  recent  sessions  without  a 
dozen  members  knowing  that  they  were  included.  Far  from 
deteriorating,  the  Legislature  under  the  budget  procedure  would, 
on  the  contrary,  develop  into  a  body  of  constant  inquiry  where 
the  appropriations  in  the  Executive's  bills  would  be  carefully 
weighed  and  all  found  wanting  be  eliminated.  F'or  membership 
in  such  a  body  the  best  equipped  of  our  public-spirited  citizens 
would  contend  and  there  find  full  play  for  the  exercise  of  their 
talents. 

As  the  Budget  Amendment  embraces  the  features  of  the  plan 
indorsed  by  the  State  platforms  of  both  political  parties,  it 
should  receive  the  vote  of  every  loyal  party  man,  and  as  it  will 
safeguard  the  public  revenues  and  effectually  prevent  a  future 
deficit  in  the  State  Treasury-,  it  is  entitled  to  the  support  of 
every  citizen  of  Maryland  who  has  the  good  of  his  State  at  heart. 


29 


BUDGET    SYSTEM   MERELY   A  CHANGE   IN   PROCEDURE. 

(Baltimore  Sun,  Sept.  25,  1916.) 

By  Francis  ISTeal  Parke. 

The  proposed  budget  system  is  submitted  to  the  voters  of 
Maryland  as  a  tested  and  approved  method  of  securing  economy 
and  efficiency  in  public  finance,  through  a  union  of  power  and 
responsibility,  without  violating  the  integrity  of  the  legislative, 
judicial  and  executive  branches  of  the  government. 

The  taxpayers  have  seen  and  endured  throughout  many  years 
a  constantly  increasing  burden  of  taxes  and  imposts  by  reason 
of  steadily  mounting  expenditures,  voted  by  the  General  As- 
sembly. This  weight  of  taxation  grew  while  every  political 
party  advocated  and  promised  economy,  when  every  official  was 
pledged  to  it,  and  when  every  legislator  affirmed  it  to  be  his  one 
inviolable  principle.  With  no  significant  exception,  these  pro- 
fessions were  intended — whether  through  motives  of  principle 
or  of  expediency  is  immaterial — to  be  translated  into  action. 
Every  legislator,  every  public  official  and  every  political  party 
knew  that  economy  was  indispensable  to  personal  and  party  pre- 
ferment and  power,  yet  the  distinguishing  characteristic  of  leg- 
islative appropriations  was  waste  and  extravagance. 

As  the  indignant  citizen  reviewed  the  work  of  the  Legislature 
and  paid  his  heavy  taxes,  he  found  himself  charging  the  Legis- 
lature with  being  extravagant  and  corrupt.  Yet  when  the  voter 
turned  to  the  individual  members  of  the  House  of  Delegates  and 
of  the  Senate  he  found  them  to  be,  in  the  main,  if  not  of  capa- 
city, at  least  honest,  economical  and  patriotic; — average  men 
whose  personal  character  and  the  result  of  their  political  course 
were  anomalous.  As  the  nature  of  its  units  must  determine 
the  nature  of  the  mass,  so  a  representative  body  whose  individ- 
ual membership  is  preponderantly  upright,  intelligent  and  fru- 
gal will  mil  legislate  in  a  wasteful  and  extravagant  manner, 
unless  the  methods  by  which  the  individuals  act  as  a  body  pre 
sent  insuperable  obstacles  to  the  play  of  their  uprightness,  intel- 
ligence and   frugality. 

A  survey  of  legislative  bodies  in  action  discloses  thai  tin-  fatal 
impediment  to  economy  and  efficiency,  and  tin'  cause  of  acts 
being  passed  inconsiderately,  is  tin    procedure  of  referring  all 


30 

bills  calling  for  appropriations  to  comparatively  small  commit- 
tees, which,  by  reason  of  the  volume,  complexity,  difficulty  and 
gravity  of  their  duties,  almost  necessarily  hold  the  bills  in  com- 
mittee until  they  are  finally  consolidated  in  one  or  two  huge 
acts  and  presented  to  the  Legislature  when  it  is  about  to  ad- 
journ, and  then  precipitately  passed  without  an  expiring  Legis- 
lature having  adequate  knowledge  of  their  contents  or  the  time 
for  pausing  to  acquire  it.  By  this  procedure  the  General  As- 
sembly has  virtually  abdicated  its  powers  and  transferred  them 
to  the  two  committees  of  Finance  and  Ways  and  Means.  While 
it  is  conceded  that  the  vast  bulk  of  business  cast  upon  a  biennial 
legislative  body  can  be  dispatched  only  by  a  division  among  com- 
mittees, yet  experience  has  demonstrated  that  this  procedure  is 
too  dangerous  and  costly  in  the  granting  of  appropriations  and 
the  raising  of  revenues,  and  must  be  reformed.  "Whilst  insti- 
tutions directly  repugnant  to  good  management  are  suffered  to 
remain,  no  effectual  or  lasting  reform  can  be  introduced,"  writes 
Burke. 

The  fundamental  defects  of  the  existing  legislative  procedure 
with  reference  to  bills  affecting  public  finance  are  the  substan- 
tially complete  surrender  to  committees  of  a  vital  function  of 
the  legislative  body,  and  the  uncontrolled  exercise  of  this  func- 
tion by  the  committees  in  comparative,  if  not  actual,  secrecy. 
The  present  procedure  leaves  the  individual  member  in  the 
dark  as  to  the  various  items  of  appropriations,  denies  him  time 
to  weigh  the  merits  of  the  items  of  the  appropriation  measures, 
throttles  discussion  and  compels  precipitate  action  in  the  tur- 
moil, confusion  and  exhaustion  of  the  closing  days  of  the  ses- 
sion. Because  of  the  impossibility  of  locating  individual  re- 
sponsibility for  what  is  done  in  the  dark  by  unknown  authors, 
the  public  has  long  since  become  apathetic  to  these  conditions. 

No  matter  what  may  bo  the  capacity,  the  intelligence  and  the 
frugality  of  legislators,  ignorance  of  what  they  are  called  upon 
to  do  and  an  absence  of  an  adequate  opportunity  for  considera- 
tion, debate  and  deliberation,  with  haste  in  the  doing  of  it, 
result  uniformly  in  wasteful,  extravagant  and  pernicious  ap- 
propriations of  money,  and  make  log-rolling  inevitable  and  an 
apparently  natural  method  of  legislation.  While  statesmen  and 
political  economists  and  the  experience  of  well  governed  coun- 
tries have  pointed  the  way  to  remedy  this  disastrous  procedure 
in  the  preparation  and  passage  of  appropriation  and  revenue 
measures,  the  people  of  Maryland  were  not  awake  to  its  grave 
import  to  them  until  aroused  by  a  huge  deficit  and  the  necessity 
cf  providing  for  current  expenses  by  public  loans,  "which,"  as 


31 

Bagebot  pertinently  observes,   ''under  ordinary   circumstances 
are  shameful." 

Tbe  accepted  reform  to  correct  tbe  evils  of  committee  rule  in 
fiscal  matters  is  a  budget  system,  which  will  modify  the  proced- 
ure in  framing  appropriation  acts,  but  which  will'not  affect  the 
wise  and  deeply  rooted  principle  of  our  governmental  structure 
that  the  General  Assembly  shall  vote  all  appropriations. 

In  the  first  place,  the  present  secrecy  attending  the  framing 
of  appropriation  bills,  which  is  provocative  of  injustice,  inequal- 
ity and  prodigality,  will  pass  with  the  adoption  of  the  budget 
system.  The  Legislature  will  no  longer  act  in  ignorance,  but 
with  full  information  from  an  authoritative  source  of  the  re- 
sources, liabilities  and  financial  condition  of  the  State;  of  the 
proposed  appropriations,  and  of  their  effect  upon  revenues  meas- 
ured in  terms  of  estimated  deficit  or  surplus,  and  of  their  sig- 
nificance and  necessity  when  judged  by  similar  appropriations 
of  the  two  preceding  fiscal  years.  And  this  information  will  be 
imparted  within  the  first  20  days  of  the  session  in  a  digested  and 
easily  available  form,  with  the  items  classified  and  clearly  item- 
ized, and  regularly  and  methodically  arranged.  Not  only  will 
every  dollar  and  every  object  of  the  bills  be  known  to  every 
member  of  the  General  Assembly,  but  the  press — the  great  organ 
of  publicity — will  know,  and  every  citizen  may  know,  the  con- 
tents. Complete  publicity  is  assured,  and  no  more  indispen- 
sable and  efficient  guardian  of  the  public  purse  can  be  provided. 

In  the  second  place,  with  the  early  submission  of  the  budget 
and  a  full  knowledge  of  its  proposals,  the  Legislature  will  be 
freed  from  the  dominion  of  its  committees,  and  will  have  an 
opportunity  to  consider,  weigh  and  discuss  its  provisions  with 
the  care,  deliberation  and  publicity  which  so  important  a  meas- 
ure demands.     In  short,  the  Legislature  will  regain  its  consti- 
tutional function  as  a  deliberate  bodv  and  as  the  controlling 
power  in  the  granting  of  money  and  imposing  taxes.     Tn  the 
third  place,  the  budget  system  will  fix  responsibility.     While 
power  is  restored  to  the  legislative  body  by  the  budget,  it  ini 
poses  upon  each  legislator  a  responsibility  which   must  be  dis 
charged  in  such  a  manner  as  to  enable  his  constituents  to  re 
ward  or  punish  him  for  his  act. 

The  limitation  upon  the  Legislature  that  it  may  u.it  increase 
any  item  in  the  budget  bills  submitted  by  the  Governor,  except 
those  relating  to  the  General  Assembly  and  the  judiciary,  is  no1 
an  impairment  of  any  legislative  power,  as  it  merely  amounts 
to  the  Governor  advising  the  Legislature  at  the  beginning  of 


Z'2 

the  session  that  he  will  not  approve  a  specific  appropriation  for 
more  than  a  designated  amount. 

In  effect,  it  is  a  veto  at  the  beginning  of  the  session,  instead 
of  one  at  the  end,  when  a  veto  usually  is  final  because  the  Legis- 
lature has  adjourned  and,  of  course,  has  no  chance  to  act. 
Should  the  Legislature  desire  to  make  a  given  appropriation 
larger  than  was  provided  by  the  Governor  in  the  budget,  it  may 
do  so,  after  action  upon  the  budget,  by  passing  a  special  act  and 
providing  therein  the  revenue  necessary  for  the  amount  thus 
appropriated. 

The  more  the  budget  plan  is  examined  the  more  conclusive  it 
appears  that  the  amendment  will  not  impair  the  power  of  the 
Legislature  over  all  appropriations  and  revenue  measures,  but 
will  correct  a  disastrous  procedure  in  legislation  now  preventing 
the  proper  discharge  of  that  power.  ]STor  has  power  been  con- 
ferred upon  the  executive  at  the  expense  of  either  the  legislative 
or  judicial  departments. 

In  designating  the  Governor  as  the  author  of  the  budget,  the 
proposed  constitutional  amendment  has  made  specific  the  gen- 
eral requirements  of  the  Constitution  that  "He  shall  from  time 
to  time  inform  the  Legislature  of  the  conditions  of  the  State, 
and  recommend  to  their  consideration  such  measures  as  he  may 
judge  necessary  and  expedient.''  In  imposing  upon  the  Gov- 
ernor the  onerous  responsibility  of  preparing  a  budget,  it  was 
believed  that  as  the  first  citizen  and  the  executive  officer  of  the 
State,  he  was  logically  the  State  official  to  prepare  the  budget. 
The  Governor  is  always  at  the  heart  of  public  affairs.  Through 
the  hierarchy  of  State  officers,  he  is  daily  brought  in  contact 
with  the  administration  of  public  affairs  in  every  portion  of  the 
State.  He  gathers  better  than  anyone  else  the  public  aspira- 
tions, views  and  necessities,  and  he  knows  the  urgency  of  par- 
ticular public  demands  and  their  comparative  importance.  Oc- 
cupying tin's  unique  position,  and  having  a  knowledge  and  vision 
coextensive  with  the  boundaries  of  the  State,  the  Governor  is 
best  qualified  to  prepare  the  budget. ' 

Moreover,  the  Governor  will  act  under  a  greater  sense  of  re- 
sponsibility and  with  more  incentive  to  produce  an  acceptable 
budget  than  any  other  State  official  or  group  of  officials  by  rea- 
son of  his  conspicuous  position,  natural  pride  of  place,  and  a 
desire  for  honor,  public  esteem  and  approval.  Furthermore,  no 
one  else  bears  the  same  weigh  1  of  political  responsibility — be- 
cause the  Governor  is  the  titular,  if  not  the  real,  lender  of  a 
political  party,  and  he  cannot  afford  fo  make  mistakes.  If  his 
budgets  are  not  distinguished   by  wisdom,  skill  and  economy. 


:VS 

and  if  they  improvidently  increase  the  burden  of  the  taxpayer 
neither  he  nor  his  party  will  survive. 

On  the  contrary,  a  brilliant  budget  will  bring'  rich  reward  to 
its  author  and  his  party. 

No  on<  Isi  should  share  this  power  and  responsibility  with 
the  Governor.  He  must  stand  in  a  splendid  isolation.  With 
both  power  and  responsibility  in  him  exclusively,  the  Governor 
may  deny  neither,  and  thereby  a  timid  Governor  will  be  sup- 
plied with  a  backbone  by  his  power,  and  a  bold  executive  will  be 
restrained  by  his  responsibility.  With  a  Governor  of  either 
type,  the  people,  knowing  that  he  has  both  power  and  responsi- 
bility, will  reward  or  punish  a  worthy  or  a  recreant  executive 
according  to  his  deeds. 

If  tlai  Board  of  Public  Works,  or  any  other  group  of  two  or 
more  officials,  had  been  designated  to  prepare  the  budget,  there 
would  have  been  a  division  of  power  and  of  responsibility  among 
the  entire  number  with  no  certainty  as  to -which  would  be  re- 
sponsible  for  this  or  that  portion  of  the  budget.  And  the  greal 
principle  and  safeguard  of  individual  and  unescapable  respon- 
sibility for  the  exercise  of  power  would  have  been  sacrificed. 
In  addition  to  tin  se  objections,  there  are  some  peculiar  to  the 
Board  of  Public  Works,  which  arise  from  the  fact  that  two  of 
members  are  elected  by  the  people,  and  one  by  the  Legisla- 
ture; that  two  hold  office  for  two  years  and  one  tor  four  years. 
and  that  while  they  generally  are,  yet  none  need  be.  of  the  same 
political  party.  All  these  things  would  make  for  confusion, 
conflid  and  cross-purposes,  and  diminish  political  responsi- 
bility. 

The  experience  of  civilized  mankind  is  that  efficiency  and 
economy  in  Government  follow  where  power  and  responsibility 
are  united,  and  the  earlier  this  principle  is  adopted  in  Maryland 
thr  better  it  will  be  tor  the  Commonwealth. 


34 


THE  A=B=C  OF  THE  BUDGET  PLAN. 

(Baltimore  Sun,  Oct.  2,  1916.) 
By  Joseph  D.  Baker. 

Question — What  is  the  budget? 

Answer- — Simply  a  commonsense  way  of  transacting  busi- 
ness. The  Government  ascertains  first  how  much  money  it  will 
have  for  general  expenditures  in  the  year,  and  then  divides  that 
sum  between  its  departments  and  institutions,  and  the  private 
institutions  it  desires  to  aid.  The  budget  means  order  and  fore- 
sight. 

Q. — Do  you  mean  to  say  that  has  not  been  the  rule  in  the 
past  in  handling  the  finances  of  the  State  of  Maryland  ? 

A. — Unfortunately,  that  has  not  been  the  rule.  Otherwise 
the  State  would  not  have  had  to  borrow  the  huge  sum  of  $2,000,- 
000  to  meet  a  deficit  in  its  general  treasury ;  it  would  not  have 
had  to  borrow  that  sum  to  pay  current  expenses  which  should 
have  been  met  with  current  income. 

Q. — Well,  what  system  has  the  State  used  in  handling  it- 
finances  ? 

A. — The  129  members  of  the  Legislature  have  done  the  best 
they  could,  without  having  any  system  worthy  the  name.  The 
only  information  they  had  about  expected  receipts  was  the  gen- 
eral estimate  included  in  the  Comptroller's  report.  They  had 
only  the  most  haphazard  information  about  the  needs  of  the 
departments  and  institutions  seeking  appropriations.  And  most 
of  the  129  members  were  men  who  had  had  no  previous  experi- 
ence in  legislative  work  and,  consequently,  were  totally  unfa- 
miliar with  the  business  of  distributing  the  State's  money. 
What  happened  was  this:  Nearly  every  fellow  made  it  his  busi- 
ness to  look  after  the  department  in  which  he  had  friends,  or 
the  institution  situated  in  his  locality.  Pressure  from  home 
made  him  <!<>  that.  Then  he  found  that  if  he  were  to  get  what 
he  asked  he  had  to  lot  the  other  fellow  get  what  he  asked.  Tt 
was  '-Kiss  me  and  I'll  kiss  you."  The  men  who  did  that  were 
nut  bad;  most  el'  them  were  good,  decent  fellows:  they  simply 
followed  the  line  of  least  resistance.  But  the  result  was  bad, 
beeause  nearly  everyone  was  interested  in  getting  through  one 
iir  more  appropriations,   ami  hardly  anyone  was  interested  in 


35 

keeping  them  down.  The  end  of  it  all  was  a  great  over-appro- 
priation, and  the  State  was  compelled  to  borrow  that  $2,000,000 
in  order  to  make  the  over-appropriation  good. 

Q. — You  say  that  under  the  budget  system  the  State  will  as- 
certain how  much  money  it  will  have,  will  limit  its  expenditui  •■- 
to  that  amount  and  then  will  divide  it.  Will  you  explain  more 
fully  the  details  of  that  plan  ? 

A. — Some  months  before  the  Legislature  meets  the  Comp- 
troller will  hand  the  Governor  an  itemized  statement  of  the 
expected  receipts  for  each  of  the  next  two  years.  The  Governor 
will  deduct  from  the  amounts  for  each  year  such  sums  as  will 
be  necessary  to  meet  the  expenses  of  the  Legislature  and  the 
judiciary,  to  pay  the  salaries  of  officials  and  to  meet  other  ex 
penses  prescribed  by  the  Constitution  or  the  laws.  These 
amounts  will  be  in  the  nature  of  fixed  charges.  When  they 
have  been  deducted  what  remains  will  be  available  for  general 
appropriations. 

Then  the  Governor  will  have  each  State  department  and  in- 
stitution, and  each  private  institution  seeking  State  aid  present 
to  him  a  statement  of  its  needs.  That  statement  must  be  in 
detail,  and  will  be  made  public.  It  must  show  how  much  is 
needed  for  each  purpose.  It  also  must  show  how  much,  if  any 
thing,  was  spent  for  that  purpose  in  the  previous  year.  When 
the  Governor  has  studied  all  this  information,  he  will  frame 
budget  bills,  dividing  the  available  money  among  the  depart- 
ments and  institutions.  These  bills  then  will  go  to  the  Legis- 
lature. 

Q.  What  will  the  Legislature  do  with  them  ? 

A. — It  may  strike  out  or  reduce  any  appropriation. 

Q. — Why  is  it  given  that  power? 

A. — So  that  the  representatives  of  the  people  will  have  a 
check  upon  the  Governor.     If  he  abuses  the  trust   given   him 
and  improperly  favors  some  institution  with  a  too  high  appro 
priation,  the  Legislature  can  reduce  or  eliminate  it. 

Q. — Can  the  Legislature  put  items  into  the   budge!    bills  Oi 

increase  ones  put  in  by  the  Governor^ 

A. — No.  If  that  could  be  done  the  door  would  be  opened 
again    for  a   mad  scramble  by  each   of  the    I  29   legislators  to  in 

crease  the  appropriations  to  \\\r  departments  or  institutions  in 
which  he  was  interested.     And  thai  would  mean  danger  of  an 
other  ovi  r  appropriation  and  another  deficit. 

Q.  Bu1  suppose  the  Governor  had  a  grudge  againsl  some 
institution  and  did  not  give  it  its  fair  share  of  money.     It'  tin 


36 

Legislature  could  not  increase  the  appropriation  to  that  institu- 
tion would  it  not  be  subjected  to  great  injustice? 

A. —  Provision  is  made  for  such  contingencies.  The  Legisla- 
ture may  pass  special  acts  of  appropriation,  if  it  provide  in 
them  for  revenue  sufficient  to  meet  the  sums  appropriated.  In 
case  the.  Governor  treated  some  institution  unjustly  the  Legis- 
lature  could  meet  the  situation  with  that  machinery. 

<,). — Will  not  that  power  lead  to  the  Legislature  again  piling 
up  excess  appropriations? 

A. — If  it  should,  there  could  not  be  another  deficit,  for  each 
such  appropriation  act  must  cany  provision  for  its  own  pay- 
ment. And  it  is  improbable  that  the  power  will  be  abused.  It 
is  easy  to  get  an  appropriation  through  the  Legislature,  but  it 
is  hard  to  get  through  new  taxation  to  meet  it,  unless  the  pur- 
pose be  clearly  good.  New  taxation  hits  some  or  all  of  the  peo- 
ple, and  must  be  explained  satisfactorily  to  them. 

Q. — Is  not  the  power  to  frame  the  budget  bills  too  much 
] lower  to  put  into  the  hands  of  one  man,  the  Governor  ? 

A. — He  has  as  much  power  now,  and  there  has  been  no  charge 
of  almse.  The  Governor  may  veto  any  appropriation  made  by 
the  Legislature.  And  as  appropriation  bills  for  years  have  been 
passed  too  late  to  override  the  veto,  the  Governor  has  had  an 
almost  absolute  power.  He  really  will  have  less  absolute  power 
under  the  budget  system,  for  the  Legislature  will  have  ample 
time  to  reduce  or  eliminate  any  item  he  may  put  in  the  budget 
bills,  or  to  pass  special  acts  appropriating  money — and  provid- 
ing the  revenue — for  any  purposes  be  may  have  neglected. 

The  important  difference  between  the  old  way  and  the  budget 
i-  (hat  in  the  past  the  Governor  acted  upon  appropriation  bills 
in  the  hurry  and  turmoil  of  the  end  of  the  legislative  session. 

aJ 

when  it  was  practically  impossible  for  him  carefully  to  consider 
the  purpose  for  which  appropriations  were  made;  whereas,  un- 
der the  budget  system,  he  will  have  months  to  go  over  the  entire 
1. Harness  and  to  act  carefully  and  deliberately. 

As  said  before,  the  budget  is  simply  a  commonsense  way  of 
transacting  business,  and  the  commonsense  of  the  people  should 
make  certain  its  adoption  in  the  November  election. 


37 


THE  FACTS  CAUSING  THE  NECESSITY  OF  A  BUDGET. 

(Baltimore  Surij  Oct.  9,  1916.) 
JBv  45.  Howell  Gbiswold,  Jr. 

Let  us  glance  at  the  State'.-  recent  financial  history. 

Gross  Debt — The  gross  bonded  debt  of  the  State  is  reported 
as  follows : 

In  L906  the  State  owed $6,167,926.13 

In  1916  the  State  owed 26,285,880.:.:. 

Increase  in  10  years $20,117,954.42 

\(  r  Debt — The  State's  net  debt  is  reported  as  follows: 

L906 $838,201.41 

L916 17,869,613.96 

[ncrease  in  10  years $17,031,412.55 

Note  that  within  the  brief  period  of  10  years  the  State  has 
passed  from  a  position  practically  free  from  debt  to  the  position 
of  a  debtor  owing  nearly  18  millions  of  dollars. 

Yearly  receipts  and  expenditures  (not  including  bond  pro- 
■  i «  ds  i  : 

1896.  1906.  1915. 

Receipts $2,544,091.84     $4,388,460.07     $7,476,337.36 

Disbursements...    2,744,036.27       4,036,000.78       7,267,719.83 

Note  thai  the  State  now  receives  and  expends  nearly  five 
millions  of  dollars  more  in  a  year  than  it  did  20  years  ago  and 
about  three  millions  more  a  year  than  it  did  10  years  ago — thai 
is  to  say,  our  "living  expenses"  have  increased  nearly  200  per 
cent  in  20  years  and  aboui  80  per  cent,  in  1"  years. 

Tax  Rate : 

In  L906 :y;i.,  cents. 

In    L916 32  l    3  cents. 

Note  thai  while  our  assessabli  basis  in  lo  years  has  increased 
50  per  cent.,  onr  (ax  rate  at  the  same  time  has  increased  aboui 
M»  per  cent. 

The  purpose  of  this  comparison  is  nol  to  indicate  thai  the 
State's  money   has  been   wasted     thai    is  a   dififerenl    problem. 


as 

For  example,  a  very  substantial  portion,  of  the  proceeds  of  our 
loans  has  gone  into  State  roads.  The  purpose  is  to  show  how- 
rapid  has  been  the  growth  of  the  State's  receipts  and  expendi- 
tures and  to  emphasize  how  vital  it  is  to  the  taxpayers  of  the 
State  that  a  proper  system  be  introduced  at  once  which  will 
lend  to  check  all  waste. 

Injury  to  the  State. 

A  man  running  a  small  business  may  struggle  along,  running 
into  debt  before  knowing  what  his  income  is  going  to  be,  but 
the  man  who  tries  this  on  a  million-dollar  scale  is  headed  for 
bankruptcy. 

The  State  of  Maryland  has  been  appropriating  money  in 
years  past — millions  of  dollars — without  an  accurate  statement 
at  hand  as  to  where  the  money  was  to  come  from. 

The  inevitable  result  was  that  the  State  began  to  live  beyond 
its  income  some  years  ago,  attempted  to  recuperate  by  increas- 
ing the  tax  rate,  and  finally  "blew  up"  in  1914  with  a  big  def- 
icit. 

The  people  of  the  State  were  aroused.  Both  parties  found  it 
expedient  to  give  to  the  voters  a  solemn  pledge  that  a  budget 
sysetm  would  be  enacted  into  law  which  would  prevent  a  recur- 
rence of  such  a  condition  of  affairs. 

One  Debt  Paid  With  Another. 

The  State  has  now  paid  off  its  creditors  and  many  people  feel 
comfortable  again.  But  it's  like  the  man  who  gave  a  new  prom- 
issory note  to  take  up  an  old  one  and  said,  "Thank  heaven,  that 
debt's  paid." 

For  the  State  paid  off  its  creditors  by  selling  $2,000,000  of 
bonds,  which  must  in  turn  be  paid  by  taxing  the  people  of  the 
State  for  the  next  15  years. 

Are  we  going  to  let  this  happen  again? 

The  Voter's  Chance. 

The  Democratic  party  has  fulfilled  its  pledge  so  far  practi 
cally  to  the  letter.  A  Democratic  Legislature  voted  in  favor  of 
and  a  Democratic  Governor  signed  a  bill  submitting  to  the  pe<> 
pie  this  fall  a  constitutional  amendment  which  will  prevent  the 
recurrence  of  a  deficit  and  do  more  than  any  other  single  act  to 
reduce  the  useless  expenditure  of  State  money.  This  law  also 
received  the  support  of  "Republicans  in  fulfillment  of  their  party 
pledge. 


39 

1 1  is  now  up  to  the  voters  of  the  State.  Will  they  allow  their 
own  lethargy  or  neglect  to  defeat  their  best  interest?  If  so, 
they  will  pay  heavily  for  it  in  cold  cash  in  the  years  to  come. 

Do  not  let  anyone  fool  you  on  this  and  discuss  theories. with 
you.  The  simple  fact  is  that  if  the  budget  amendment  is  not 
passed  this  fall  the  taxpayers  of  the  State  will  pay  heavily  for  it. 

How  the    Budget  Amendment   Was  Framed. 

The  amendment  has  been  so  fully  and  ably  explained  by  my 
associates  on  the  Goodnow  Commission  that  it  is  a  waste  of 
space  to  repeat  this  explanation  in  different  terms. 

The  framing  of  the  amendment  required  several  months  of 
bard  work  by  members  of  the  commission.  The  proposed  sys- 
tem is  founded  on  elementary  requirements  of  exact  business 
adjusted  to  governmental  needs  and  sound  principles  of  govern- 
ment. It  represents  the  composite  judgment  not  only  of  the 
members  of  the  commission,  but  of  manv  men  called  into  con- 
icrence — the  leading  constitutional  lawyers  of  the  State,  men  of 
wide  experience  in  State  finance  and  in  practical  government, 
officials  and  former  officials  of  the  State  of  Maryland — all  giv- 
ing their  time  and  advice  freely  to  help  solve  this  question  which 
is  of  such  vast  importance  to  the  taxpayers  of  the  present  as 
well  as  to  the  future  prosperity  of  our  State. 

The  Kind  of  Objection  That  May  be  Raised. 

Every  State  has  in  it  men  who  express  doubts  on  any  big 
proposition.  No  man's  voice  has  been  raised  in  open  opposi- 
tion to  the  budget  system.  Objections  to  details  of  the  plan  pre- 
pared by  the  Goodnow  Commission  have  been  brought  forward. 
This  was  to  be  expected. 

No  one.  for  example,  would  question  the  necessity  of  having 
a  Court  House  in  a  big  community.  Some  people  however, 
would  have  it  of  stone,  some  prefer  green  window  shadi  -  and 
some  a  slanting  roof. 

The  man  who  would  say  that  the  Court  House  should  not  be 
erected  until  all  the  people  are  prepared  to  agree  with  his  own 
taste  as  to  details  lias  lost  his  sense  of  proportion. 

And  yet  you  will  perhaps  find  men  small-minded  enough  to 
advise  that  a  reform  of  greal  benefit  to  the  State  be  rejected 
because  one  or  two  details  do  not  satisfy  their  particular  points 
of  view. 


40 

Vote  for  the  Amendment. 

We  have  this  amendment  before  us — we  have  a  remarkable 
opportunity.  I  do  not  believe  that  sensible  voters  will  allow  big- 
phrases  from  small  men  critcizing  diminutive  technicalities  to 
influence  their  judgment  against  their  own  best  interest,  No 
ether  form  of  argument  can  be  used  against  the  amendment. 

The  taxpayers'  money  is  a  trust  fund.  The  men  who  pay 
taxes  are  entitled  to  have  their  money  spent  not  only  honestly 
but  wisely,  economically  and  with  foresight.  No  State  can  do 
this  thoroughly  without  a  budget  system. 

Every  voter  should  make  a  mental  note  now  how  to  vote  for 
the  budget  amendment  on  November  7. 


A  SIMPLE  STATEMENT  OF  THE  BUDGET  PLAN. 

(Baltimore  Sun,  Oct.  16,  1916.) 

By  Dr.  Frank  J.  Goodnow. 

(President  Johns  Hopkins  University. ) 

The  last  few  years  have  proved  that  the  financial  method-  of 
the  State  of  Maryland  should  be  changed.  To  provide  the  nec- 
essary modifications  in  those  financial  methods  is  the  purpose 
of  tli"  constitutional  amendment  passed  by  the  last  Legislature 
and  to  be  submitted  to  the  voters  of  the  Stale  at  the  coming 
(  lection  in  November. 

The  budget  amendment,  as  this  proposed  amendment  has  been 
cdled.  attempts  to  do  the  following  things: 

In  the  first  place,  its  purpose  is  to  place  before  the  Legisla- 
ture at  the  beginning  of  each  regular  session  a  complete  picture 
of  the  State's  financial  conditions,  from  the  point  of  view  both 
of  the  revenues  which  are  to  be  expected  for  the  next  two  \<  ars 
and  of  the  needs  of  the  State  for  the  same  period.  These  esti 
mates  of  revenue  and  expenditure  are  to  be  made  up  prior  to  the 
assembling  of  the  Legislature.     They  are  to  be  based  upon  the 


41 

statements  of  the  different  State  officers  and  the  heads  of  pri- 
vate institutions  asking  for  State  moneys,  supplemented  by  pub- 
lic hearings,  at  which  those  asking  for  State  moneys  mav  be 
called  upon  to  show  what  are  their  needs  and  whether  they 
have  made  an  efficient  use  of  the  moneys  guaranteed  to  them  in 
the  past. 

The  Board  of  State  Aid  and  Charities,  which  under  the  law 
has  certain  powers  over  against  State-aided  institutions,  may  be 
culled  upon  at  such  hearings  or  otherwise  to  give  its  judgment, 
both  as  to  the  efficiency  and  needs  of  such  institutions.  The 
per  capita  law  passed  by  the  last  Legislature  both  makes  neces- 
sary the  action  of  the  board  and  facilitates  the  exercise  of  its 
powers  of  supervision. 

In  the  second  place,  the  proposed  budget  amendment  concen- 
trates in  the  Governor  both  the  powers  and  the  responsibility 
for  making  the  estimates  to  be  submitted  to  the  Legislature. 

Finally,  the  budget  amendment  provides  that  the  Legislature 
may  not  add  new  items  to  the  estimates  as  submitted  by  the 
Governor  or  increase  items  contained  therein,  except  upon  the 
condition  that  if  make  provision  for  such  increases  by  levying 
special  taxes  therefor.  The  Legislature  may,  however,  reduce 
or  strike  out  any  items  in  the  estimates  except  those  neeessary 
for  fulfilling  the  financial  obligations  of  the  State. 

The  only  real  difference  between  the  method  proposed  in  the 
budge!  amendment  and  the  present  method  is  that  the  action  of 
the  Governor  is  by  the  former  had  before,  by  the  latter  subse- 
quent to  action  by  the  Legislature.  At  the  present  time  the 
Governor  may  through  the  exercise  of  his  veto  power  determine 
within  the  limits  fixed  by  the  Legislature  the  amount  of  even 
appropriation.  By  the  proposed  amendment  be  must  take  action 
under  the  public  eve.  By  present  methods  he  may  act  in  the 
M'crecv  of  the  executive  chamber. 

Such  rn  brief  is  the  scope  of  the  proposed  budget  amendment. 
Tt  is  bused,  as  all  will  recognize,  on  the  charter  of  the  City  of 
Baltimore,  which  has  been  in  successful  operation  for  almost  20 
years,  ^o  one  when  called  to  vote  for  the  amendmenl  may  feel 
.rii\  hesitation  aboul  casting  his  vote  in  favor  of  an  untried  and 
perhaps  dangerous  expedient.  The  experience  which  the  (  ity 
of  Baltimore  has  had  since  1808  lays  the  basis  \'^v  the  expecta 
tien  thai  nothing  but  good  will  follow  the  adoption  by  the  peo 
pie  c\'  the  State  of  Maryland  of  the  proposed  budgH  amendmenl 
)<■  th<    State  Constitution. 


42 


THE  STATE  BUDGET.' 

(  Horace  K.  Flack.  Department  of  Legislative  Reference, 

Baltimore,  Md.) 

I  have  been  requested  to  prepare  a  statement  showing  par- 
ticularly what  the  Constitutional  Convention  of  the  State  of 
jSTew  York  has  done  in  regard  to  making  provision  for  a  scien- 
tific State  Budget.  In  view  of  the  fact  that  this  question  is  now 
being  discussed,  relative  to  securing  some  form  of  state  budget 
for  Maryland,  it  seems  worth  while  to  give  a  brief  summary  of 
what  has  been  done  in  other  states  in  regard  to  this  very  impor- 
tant matter. 

Statements  were  quite  freely  made  before  the  Committees 
and  Delegates  of  the  New  York  Constitutional  Convention,  that 
no  state  in  this  country  had  made  provision  for  a  really  scien- 
tific budget,  and  these  statements  seemed  to  have  gone  uncon- 
tradicted. Efforts  of  course,  have  been  made  in  a  few  states  to 
provide  for  a  state  budget,  and  the  term  "state  budget"  has  been 
used  in  a  few  instances  to  characterize  these  efforts. 

Indiana  seems  to  have  been  the  first  state  to  pass  a  law  re- 
quiring submission  of  a  report  containing  recommendations  for 
the  appropriations  needed  for  the  state  departments  and  insti- 
tutions, this  law  being  passed  in  1901.  This  law  provides  for 
the  appointment  by  the  Governor  within  ten  days  after  each  gen- 
eral election,  of  a  committee  of  three  members-elect  of  the  Gen- 
eral Assembly.  It  is  the  duty  of  this  committee  to  visit  and 
investigate  all  the  state  penal,  benevolent,  educational,  and  re- 
formatory institutions,  and  all  state  departments  for  which  the 
state  makes  appropriations,  and  to  prepare  and  submit  to  the 
Legislature  a  report,  showing  the  appropriations  recommended 
for  each  department  and  institution.  While  this  report  and  rec- 
ommendation  do  not  constitute  a  scientific  budget,  it' has  been 
3tated  that  it  is  a  great  improvement  over  the  former  method. 

The  State  Board  of  Control  of  California  has  been  given 
authority  to  prepare  a  budget  covering  the  financial  needs  of 

This  article  was  printed  In  the  itaitimore  Municiixii  -lounuil  of  Sep- 
tember  17,  1915.  \'<.  effort  has  been  made  to  bring  the  article  up-to-date, 
bul  if  should  be  added  that  the  proposed  Constitution  of  New  York. 
which   Included   a    provision   for  a    State  Budget,   was  defeated.     No 

opportunity,  however,  was  given  for  a  separate  vote  on   the  budget  pro- 
posal. 


43 

the  different  state  departments  and  institutions.  The  Board 
divided  the  proposed  appropriations  under  the  two  main  head- 
ings of  General  Appropriations  and  Special  Appropriations. 
The  report  submitted  to  the  Legislature  of  1915  by  the  Board  of 
Control  gives  a  reference  to  the  constitution  or  statute  author- 
izing the  appropriation  for  each  department  or  institution  with 
the  amount  of  appropriation  made  by  the  preceding  Legislature. 
the  amount  requested  by  the  department  or  institution  and  the 
amount  recommended  by  the  Board.  The  total  amounts  re- 
quested by  the  several  departments  or  institutions  amounted  to 
over  $17,000,000,  and  the  amounts  recommended  by  the  Board 
of  Control  amounted  to  over  $15,000,000,  being  a  reduction  of 
a  little  more  than  $2,000,000.  The  total  special  appropriation 
tequested,  amounted  to  over  $7,000,000,  and  the  total  special 
appropriation  recommended  by  the  Board  of  Control  amounted 
to  over  $3,000,000,  being  a  reduction  of  nearly  $4,000,000. 
The  report  submitted  by  the  Board  of  Control  also  contained  a 
statement  showing  the  estimated  receipts. 

The  State  Board  of  Public  Affairs  in  Wisconsin  submits  a 
budget  to  the  Legislature  containing  the  requests  for  appropria- 
tions submitted  to  the  Board  by  the  various  state  departments 
and  institutions.  The  Board,  however,  makes  no  recommenda- 
tions and  it  is  stated  by  the  Board  itself  that  it  does  not  regard 
it  as  its  duty  to  do  more  than  gather  the  facts  and  requests  of 
the  several  departments  and  institutions,  and  to  submit  this  data 
in  a  systematic  way  for  the  use  of  the  Legislature.  The  report 
submitted  by  the  Board  of  Public  Affairs  shows  the  actual  re- 
ceipts and  disbursements  for  the  three  preceding  fiscal  years, 
the  estimated  receipts  and  disbursements  for  the  current  year 
and  the  appropriations  requested  for  the  ncx!  biennial  period. 
The  Board  states  that  by  means  of  this  budget  the  Legislature 
will  be  able  to  work  out  a  final  fiscal  plan  which  will  become  the 
official  budget  of  the  Legislature  when  adopted.  The  Board 
also  states  that  it  is  the  purpose  of  the  budget  to  give  the  Legis 
lature  lull  and  complete  information  in  regard  to  financial  facts 
and  to  help  the  Legislature  in  determining  policies  and  drafting 
appropriation  measures;  p,  substitute  knowledge  for  guess,  and 
to  develop  an  equilibrium  between  estimated  receipts  and  esti 
mated  disbursements.  It  is  stated  that  prior  to  L913  there  was 
no  Legislative  plan  of  appropriations,  that  appropriation  clauses 
were  not  uniform  in  language,  ami  that  tin-  appropriation  meas 

ures  were  scattered  throughout  the  statutes  and  session  laws. 
The  Legislature  of  1013,  however,  adopted  uniform  phraseology 
in  drafting  appropriation  measures  and  a  uniform  plan  of  male 


44 

ing  appropriations.  It  was  felt  desirable  to  have  all  appropria- 
tions, whether  temporary  or  permanent,  brought  together  in  one 
place.  It  was  not  considered  wise.,  however,  to  make  appropria- 
tions for  the  individual  departments  and  institutions  in  exhaus- 
tive detail,  since  this  would  not  give  reasonable  opportunity  for 
the  officials  to  exercise  judgment  in  administering  the  affairs  in 
their  charge.  The  budget  as  proposed  in  Wisconsin,  however, 
does  not  demand  the  passage  of  a  consolidated  appropriation 
bill,  but  seems  to  have  been  designed  with  a  view  to  the  prepa- 
ration df  separate  appropriation  bills  for  each  department  or 
institution  of  the  state.  The  Board  points  out  that  there  must 
be  complete  harmony  between  the  classification  of  accounts  as 
used  in  the  budget,  and  the  classification  of  accounts  as  used  by 
the  various  departments  in  recoi'ding  their  disbursements. 

In  1913,  Ohio  passed  an  act  for  the  establishment  of  a  budget 
system  for  all  state  departments  and  institutions,  and  this  act 
-ciins  to  come  nearer  making  provision  for  a  scientific  budget 
than  any  act  passed  prior  to  that  time.  The  Ohio  act  provides 
for  an  executive  budget,  thai  is  a  budget  prepared  by  the  Gov- 
ernor for  submission  to  the  Legislature.  This  act  makes  it  the 
duty  of  all  state  officers  and  institutions  to  submit  to  the  Gov- 
ernor on  or  about  the  15th  day  of  November  prior  to  the  assem- 
bling of  the  Legislature  an  estimate  in  itemized  form,  stat- 
ing the  amount  of  money  needed  for  the  next  biennial  period. 
It  is  also  made  the  duty  of  the  State  Auditor  to  furnish  the 
Governor  with  statements,  showing  the  annual  revenues  and 
expenditures  on  account  of  each  appropriation  for  the  preced- 
ing four  years,  together  with  certain  other  financial  statements. 
The  Governor  is  given  authority  to  appoint  competent  disinter 
ested  persons  to  examine,  without  notice,  the  affairs  of  any  de- 
partment or  institution  for  the  purpose  of  ascertaining  facts 
and  to  make  recommendations  relative  to  increasing  the  effi- 
ciency and  curtailing  the  expenses  therein.  Under  authority  of 
this  law,  the  Governor  appointed  a  Budget  Commissioner  who 
prepared  a  very  comprehensive  budget  which  was  submitted 
to  the  Legislature  in  L915.  This  budget  contained  an  item 
ized  statement  offhe  requests  made  by  each  department  or  insti 
tution,  very  much  on  the  order  of  requests  which  are  submitted 
by  the  Municipal  Departments  of  Baltimore  to  the  Hoard  of 
Estimates,  tlie  requests  being  given  in  the  first  column,  and  the 
recommendal  ion  of  the  Budget  ( iommissioner  being  given  in  the 
next  column.  The  budget  as  submitted  also  gave  the  appro 
priations  (<>v  each  of  these  items  for  the  year  191  I.  Following 
the  budget   \'<<r  eaeh  department  or  institution,  there  was  given 


45 

the  critical  comment  of  the  Budget  Commissioner,  containing 
his  reasons  for  the  recommendations  made  by  him.  The  budgel 
as  submitted  consisted  of  369  pages  and  was  indexed,  so  that 
it  was  quite  easy  Hot  a  member  of  the  Legislature  to  find  any 
information  desired. 

A  few  other  states  have  made  some  progress  in  improving 
their  system  of  making  appropriations,  lint  as  a  general  thing 
the  budget  or  appropriation  bills  are  prepared  by  the  legisla- 
tive committees.  The  question  of  a  proper  budgel  has  received 
cOnsiderabL  attention  in  a  number  of  states,  and  the  Legislative 
[nvestigating  Committee  appointed  by  the  Alabama  Legislature 
in  tin  early  part  of  the  year  submitted  a  report  July  L3,  L915, 
recommending  that  the  state  budget  he  compiled  and  submitted 
to  the  Legislature  by  the  Governor.  The  recommendation  of 
this  Committee  was  to  the  effect  that  the  budget  include  not  only 
an  estimate  of  what  amounts  may  be  necessary  for  the  conduct 
of  state  affairs,  but  the  method  of  raising  the  amount  of  reve- 
nues necessary  to  meet  tin*  outlay.  The  Committee  drafted  a 
bill  to  carry  out  their  recommendation  in  this  regard.  The 
Committee  called  attention  to  the  practice  there  in  which  the 
heads  of  departments  and  state  institutions  presented  appro- 
priation bills  through  some  friend  in  the  Legislature,  and  that 
ibis  system  resulted  in  activities  more  or  less  akin  to  lobbying 
for  the  purpose  of  bringing  about  favorable  legislation  and  ap- 
propriations. The  following  quotation  is  taken  from  the  report 
of  the  Alabama  Committee:  •"In  the  hurly-burly  of  a  short 
legislative  session,  the  result  is  that  appropriations  do  not  re- 
ceive the  necessary  consideration.  The  consideration  that  is 
given  is  not;  supported  by  any  intelligent  advice  or  investiga 
tion,  tin  result  being  that  the  department,  interest  or  institu- 
tion which  bas  the  most  influential  friends  present  obtains  the 
largest  appropriation  without  reference  to  the  relation  the  sev 
era]  departments  bear  to  each  other  or  the  State.  Alabama  can 
never  enter  on  a  high  plane  in  the  conduct  of  ]\<  business  affairs 
until  sonic  more  rational  and  business-like  system  is  devised. 
Throughout  the  country  wbat  is  known  as  the  budgetary  law- 
are  coming  to  be  considered  by  way  of  meeting  the  objections 
described  above.  A  budgel  has  been  defined  as,  'the  financial 
statement  of  the  government  for  a  definite  period  which  reveals 
in  details  the  objects  and  amount  of  expenditure-,  tbe  source 
and  yield  of  revenues  and  the  way  tbe  expenditures  ami  reve 
nues  aie  made  to  balance'.     It  properly  includes  estimates  both 

of  revenues    as   well    as  of  expenditure-." 


46 

The  Alabama  Committee  also  cites  the  fact  that  the  Gov- 
ernors of  Alabama,  Colorado,  Massachusetts,  Michigan,  Minne- 
sota, Nevada,  New  York,  North  Dakota,  Tennessee,  Washing- 
ton and  West  Virginia,  urge  state  budget  laws. 

It  remained,  however,  for  the  Now  York  Constitutional  Con- 
vention-to  propose  a  method  for  the  state  of  New  York  which 
is  very  similar  to  the  budget  prepared  by  a  large  number  of  mu- 
nicipalities in  this  country.  It  has  been  noticed  that  the  Ohio 
budget  is  prepared  by  the  Governor  or  under  his  supervision, 
and  that  the  proposed  budget  for  Alabama  provided  for  an 
executive  budget,  but  in  no  case  has  there  been  any  restriction 
placed  upon  the  legislature  as  to  its  actions.  The  proposal  as 
adopted  by  the  New  York  Constitutional  Convention  prohibits 
the  Legislature  from  increasing  any  item  in  the  budget  as  sub- 
mitted by  the  Governor,  merely  conferring  on  the  Legislature 
the  power  to  cut'  out  or  reduce  any  item.  Provision  is  made, 
however,  for  separate  appropriation  bills,  but  none  of  these  can 
be  considered  until  after  the  budget  as  submitted  by  the  Gov- 
ernor has  been  finally  acted  upon  by  the  Legislature.  In  view 
of  the  very  great  importance  of  the  subject  and  to  the  careful 
study  given  to  it  by  the  New  York  Constitutional  Convention, 
it  seems  advisable  to  give  the  New  York  Proposal  in  full.  The 
proposed  amendment  as  submitted  by  the  New  York  Convention 
is  as  follows : 

Section  1.  On  or  before  the  fifteenth  day  of  November  in  the  year 
nineteen  hundred  and  sixteen  and  in  each  year  thereafter,  the  head  of 
each  department  of  the  State  government  except  the  Legislature  and 
Judiciary,  shall  submit  to  the  Governor  itemized  estimates  of  appropria- 
tions to  meet  the  financial  needs  of  such  department,  including  a  stale 
ment  in  detail  of  all  monies  for  which  any  general  or  special  appropria- 
tion is  desired  at  the  ensuing  session  of  the  Legislature,  classified  accord- 
ing to  relative  importance  and  in  such  form  and  with  such  explanation 
as  the  Governor  may  require. 

The  Governor,  after  public  hearing  thereon,  at  which  he  may  require 
the  attendance  of  heads  of  departments  and  their  subordinates,  shall 
revise  such  estimates  according  to  his  judgment. 

Itemized  estimates  of  the  financial  needs  of  the  Legislature  certified 
by  the  presiding  officer  of  each  House  and  of  the  Judiciary  certified  by 
the  Comptroller,  shall  lie  transmitted  to  (be  Governor  before  the  fif- 
teenth day  of  January  next  succeeding  for  inclusion  in  the  budgel  with- 
out revision,  hnt  with  such  recommendation  as  he  may  think  proper. 

on  or  before  the  first  day  of  February  next  succeeding  he  shall  submit 
to  the  Legislature  a  budget  containing  ;i  complete  plan  of  proposed 
expenditures  and  estimated  revenues,  it  shall  contain  .-ill  the  estimates 
so  revised  or  certified  mid  shall  be  accompanied  by  a  bill  or  bills  for  all 
proposed  appropriations  and  reappropriations,  clearly  itemized:  it  shall 
show  the  estimated  revenues  for  (he  ensuing  fiscal  year  and  the  esti- 
mated surplus  or  deficit  of  revenues  al  the  end  of  the  current  fiscal 
year  together  With  the  measures  of  taxation,  if  any.  which  the  <h>v 
ernor  may  propose  for  the  increase  of  the  revenues.  It  shall  be  accom- 
panied by  a  statement  of  the  current  assets,  liabilities,  reserves  and  sur- 


47 

plus  or  deficit  of  the  State;  statements  <>f  the  debts  and  funds  of  the 
Slate:  an  estimate  of  its  financial  condition  as  of  the  beginning  and 
.■lid  of  the  ensuing  fiscal  year;  and  a  statement  of  revenues  and  ex- 
penditures for  the  two  fiscal  years  next  preceding  said  year,  in  form 
suitable  for  comparison.  The  Governor  may,  before  final  action  by  the 
Legislature  thereon,  amend  or  supplement  the  budget. 

A  copy  of  the  budget  and  of  any  amendments  or  additions  thereto 
shall  be  forthwith  transmitted  by  the  Governor  to  the  Comptroller. 

The  Governor  and  the  heads  of  such  departments  shall  have  the 
right,  and  it  shall  be  their  duty,  when  requested  by  either  House  of  the 
Legislature,  to  appear  and  be  heard  in  respect  to  the  budget  during  the 
consideration  thereof,  and  to  answer  inquiries  relevant  thereto.  The 
procedure  for  such  appearance  and  inquiries  shall  be  provided  by  law. 
The  Legislature  may  not  alter  an  appropriation  bill  submitted  by  the 
Governor  except  to  strike  out  or  reduce  items  therein;  but  this  provi- 
sion shall  not  apply  to  items  for  the  Legislature  or  Judiciary.  Such  a 
bill  when  passed  by  both  Houses  shall  be  a  law  immediately  without 
further  action  by  the  Governor,  except  that,  appropriations  for  the 
Legislature  and  Judiciary  shall  be  subject  to  his  approval  as  provided 
in  Section  9  of  Article  IV. 

Neither  House  shall  consider  further  appropriations  until  the  appro- 
priation bills  proposed  by  the  Governor  shall  have  been  finally  acted  on 
by  both  Houses;  nor  shall  such  further  appropriations  be  then  made 
except  by  separate  bills  each  for  a  single  work  or  object,  which  bills 
shall  be  subject  to  the  Governor's  approval  as  provided  in  Section  9  of 
Article  IV.  Nothing  herein  contained  shall  be  construed  to  prevent  the 
Governor  from  recommending  that  one  or  more  of  his  proposed  bills  be 
passed  in  advance  of  the  others  to  supply  the  immediate  needs  of  gov- 
ernment. 

The  above  proposed  constitutional  amendment   was  drafted 
by  the  Finance  Committee  of  the  Convention  after  considering 
seven  or  eight  proposals  relative  to  a  State  budget.     One  of 
these  proposals  (No.  13)  provided  that  there  should  he  a  Budget 
Commission  composed  of  the  Governor  (with  two  votes),  the 
Lieutenant-Governor,  the  Treasurer  and  the  Comptroller.    This 
proposal  gave  the  Legislature  the  power  to  diminish  but  nol  to 
increase  the   appropriations   for    any   subject    included    in    the 
budget.     Another  proposal  (No.  10)  provided  for  the  appoint- 
ment of  a  Board  of  Estimate  by  the  Governor,  consisting  of 
3uch  heads  of  departments  and  members  of  the  Legislature  as 
he  may  select  and  of  which  he  was  to  be  chairman.     This  pro 
posal  also  prohibited  the  Legislature  from  increasing  any  item 
and  it  also  contained  a  provision  that  no  legislative  enactmenl 
should  be  attached  to  the  annual  appropriation  bill.      Proposal 
No.  223  provided  for  the  formulation  of  a  Si  ate  budget  by  the 
Governor  with  the  advice  of  his  council,  composed  of  the  Secre 
tary  of  State,  the  Comptroller,  the  Treasurer,   the   Attorney 
General,  and  State  Engineer.    This  proposal,  however,  lefl  the 
Legislature  free  to  amend  the  budget  in  any   particular.      Pro 
posal  No.  345  merely  made  it  the  duty  of  the  heads  <i\'  all  de 
partments  and  institutions  to  submit  to  the  Governor  a  -tate- 


48 

rneiit,  under  oath,  as  to  the  appropriations  needed  for  their  re- 
spective departments  and  institutions  and  for  the  transmission 
of  these  requests,  with  his  recommendations,  to  the  Legislature. 
Proposal  No.  444  made  it  the  duty  of  the  Governor  to  prepare 
a  State  budget  and  prohibited  the  Legislature  from  increasing 
any  item.     This  proposal  also  contained  a  provision  to  the  effect 
that  if  the  Legislature  failed  to  pass  the  appropriation  bill,  the 
several  departments  might  expend  during  the  ensuing  fiscal  year 
the  same  amounts  as  authorized  for  the  current  year.     Provi- 
sion was  also  made  that  no  appropriation   for  any  department, 
other  than  those  provided   for  in  the  budget,   should  be  made 
except  by  separate  hill  or  bills,  but  that  such  separate  bill  or 
bills  should  proceed  to  passage  only  when  the  Governor,  in  a 
message  to  the  Legislature,  should  have  certified  that  there  was 
a  public  emergency   requiring  such  appropriation.      This  pro- 
posal would,  of  course,  have  made  it  impossible  for  the  Legis- 
lature to  make  any  appropriation  which  did  not  meet  the  ap- 
proval of  the^  Governor  before  its  passage.      Proposal  5To.  470 
was  prepared  largely  by  the  ]NTew  York  Bureau  of  Municipal 
Research  and  provided  for  the  preparation  of  the  budget  by  the 
Governor.     This  proposal  also  required  the  Legislature  to  re- 
solve itself  into  a  Committee  of  tin1  Whole  not  less  than  one  day 
each  week,  at  which  time  the  Governor  and  the  heads  of  depart- 
ments were  to  have  the  privilege  of  the  floor  to  explain  the  esti- 
mates of  the  appropriations   recpiested  and  answer  sneh  ques- 
tions as  may  be  asked  by  members  of  the  Legislature.     The  ap- 
propriations for  each   department  were  to  be  considered  sepa- 
rately.    The  Legislature  could  not,  of  course,  increase  but  could 
decrease  any  item  in  the  appropriation  bill.     When  reported  by 
the  Committee  of  the  Whole,  the  budget  or  appropriation  bills 
were  to  take  precedence  over  all  other  measures  and  no  new  sub- 
ject or  item  could  he  appropriated  except  by  separate  hill,  which 
separate1  hill  might  he  vetoed  by  the  Governor.     This     proposal 
also  gave  the  Governor  authority  to  authorize  the  several  depart- 
ments to  make  the  same  expenditures  as  provided  by  the  lasl 
appropriation  in  ease  the  Legislature  failed  to  pass  the  budget. 
Proposal  N"o.  646  provided  tor  the  preparation  of  a  budget  by 
the  Governor,  but  unlike  many  of  the  other  proposals,  this  one 
gave  the  Legislature  the  power  by  a  three-fourths  vote  to  in 
crease  any  item  in  the  budget. 

ft  will  he  observed   thai   the  proposed  amendment   as  finally 
submitted  by  the  Convention  contains  some  of  the  elements  in 
nearly  all  of  the  proposals  as  submitted.     The   Finance  ('on, 
mittee,  which  had  charge  of  all  proposals  relating  to  the  budget. 


49 

was  composed  of  very  able  men,  among  them  being  Messrs. 
Henry  L.  Stimson,  a  member  of  President  Taft's  cabinet ;  Seth 
Low,  former  President  of  Columbia  University  and  Mayor  of 
New  York  City ;  Herbert  Parsons,  Robert  F.  Wagner,  John  B. 
Stanchfield  and  Delancey  Nicoll.  This  Committee  had  several 
hearings  on  the  subject  and  invited  some  of  the  ablest  men  in 
the  country  to  discuss  the  subject  with  them,  among  these  being 
former  President  Taft,  President  Goodnow,  of  the  Johns  Hop- 
kins University;  President  Lowell,  of  Harvard  University;  Mr. 
Fitzgerald,  the  Chairman  of  the  Appropriations  Committee  of 
the  National  House  of  Representatives ;  and  former  Governor 
Glynn,  of  New  York. 

Arguments  foe  aw  Executive  Budget. 

The  Finance  Committee1,  after  careful  consideration,  reported 
the  amendment  printed  above  on  August  4th,  at  the  same  time 
submitting  a  report  covering  twenty-two  pages,  in  which  the 
Committee  gave  the  results  of  its  work  and  the;  reasons  for  rec- 
ommending the  amendment  in  that  form.  It  was  pointed  out 
that  the  United  States  is  substantially  the  only  civilized  coun- 
try in  which  a  scientific  budget  system  is  unknown  and  that  this 
applies  both  to  the  National  and  State  governments.  The  Com- 
mittee called  attention  to  the  fact  that  no  financial  plan  is  pre- 
sented to  our  legislative  bodies  by  the  men  who  are  responsible 
for  the  conduct  of  government,  and  that  no  material  whatever 
for  comparison  with  the  past  is  presented  by  our  executives,  in 
such  a  way  that  the  Legislature  and  the  public  can  understand 
them  and  hold  the  spenders  of  public  monies  responsible,  but 
that  on  the  contrary,  our  appropriation  and  revenue  bills  are 
prepared  in  the  "comparative  secrecy  of  legislative  committees 
and  rushed  through  in  the  hurry  of  the  final  days  of  a  legislative 
aession".  The  Committee  also  pointed  out  that  the  law  of 
1010  requiring  the  several  departments  of  the  State  govern 
ment  to  submit  annual  estimates  to  the  Comptroller,  for  sub- 
mission by  him  to  the  Legislature,  has  proved  of  little  or  no 
value,  since  the  only  function  of  the  Comptroller  was  to  assem 
ble  these  estimates  and  transmit  them  to  the  Legislature.  The 
result  was  thai  every  departmenl  made  the  estimates  so  high 
that  very  little  attention  was  paid  to  them.  The  reporl  of  the 
Committee,  which  was  approved  by  every  member  with  a  single 
exception,  was  to  the  effect  that  the  Legislature  was  noi  the 
proper  branch  of  government  to  initiate  the  budget,  for  the  fol 
lowing  reasons: 


50 

(1)  That  the  proper  function  or  work  of  the  Legislature  is 
legislative  and  that  it  has  no  administrative  control  or  authority 
over  the  several  bureaus  and  departments  and  that  it  could  not 
exercise  executive  supervision  to  produce  the  desired  result  for 
less  money  by  adopting  a  more  efficient  method.  "In  a  word, 
it  cannot  produce  the  constant  necessary  team  play  and  co-opera- 
tion which  is  essential  to  economy." 

(2)  That  the  members  of  the  Legislature  are  each  respon- 
sible to  and  dependent  upon  a  single  district  of  the  State  and 
not  responsible  solely  to  the  State  as  a  whole.  As  a  result  of 
this,  any  financial  program  prepared  by  the  Legislature  neces- 
sarily tends  to  represent  a  compromise  or  bargain  between  differ- 
ent districts,  this  process  being  stigmatized  by  the  terms  "log 
rolling"  and  "'pork  barrel". 

(3)  That  the  preparation  of  the  budget  by  the  Legislature 
tends  to  shield  it  from  real  criticism;,  since  no  body  can  ade- 
quately criticise  its  own  work.  If,  however,  the  budget  is  pre- 
sented by  the  Executive,  it  will  receive  criticism  and  sugges- 
tions even  from  members  of  the  party  to  which  the  Executive 
belongs,  since  the  viewpoint  of  the  man  who  grants  money  is 
different  from  that  of  the  man  who  asks  for  it.  Under  present 
methods,  the  man  who  makes  up  the  budget  or  appropriation 
bill  is  one  who  leads  the  debate  on  the  majority  side,  so  that  no 
criticism  can  be  expected  from  him.  Attention  was  also  caller] 
to  the  fact  that  the  minority  party  have  participated  in  the 
work  of  the  committees  and  their  views  frequently  accommo- 
dated, so  that  the  budget  debates  have  become  formal  and  per- 
functory. 

(4)  The  fact  that  no  program  is  formulated  until  the  Legis- 
lature itself  brings  in  the  appropriation  bill  tends  to  'destroy 
publicity  and  opportunity  for  debate.  Under  present  methods, 
no  citizen  leams  anything  of  the  financial  program  until  the 
committee  reports  the  appropriation  bill,  which  is  usually  so 
late  in  the  session  that  no  opportunity  for  effective  suggestions 
or  criticism  is  afforded.  It  was  stated,  as  a  matter  of  fact,  that 
during  the  past  twenty-one  years,  every  appropriation  bill 
passed  by  the  New  York  Legislature,  except  one,  had  been  hur- 
ried through  in  the  final  hours  of  the  session,  without  the  neces 
sity  even  of  being  printed  and  lying  on  the  desks  of  the  mem 
bers  for  three  days.  Under  these  conditions,  it  was.  of  course, 
impossible  for  members  of  the  Legislature  themselves  lo  know 
the  exact  financial  conditions  of  the  State. 

After  giving  the  above  reasons  why  flic   formulation  of  the 
State  budget  is  not  a  legislative  function,  the  Committee  ''ailed 


51 

attention  to  some  of  the  evils  of  the  present  system.  The  ( om- 
mittee  found  that  the  present  system  of  permitting  the  Gov- 
ernor to  veto  items  in  appropriation  bills  prepared  by  the  Legis- 
lature had  resulted  in  transferring  to  the  Governor,  to  a  large 
extent,  "the  historic  function  of  the  Legislature  of  holding  the 
pure  strings  of  the  State/'  and  that  the  Legislature  had  passed 
many  appropriation  bills  with  items  which  they  believed  to  be 
too  large  or  improper,  relying  upon  the  Governor  to  prune  them 
down.  The  Committee  also  called  attention  to  the  fact  thai 
under  present  methods,  the  members  of  the  Legislature  are  not 
given  adequate  opportunity  to  ask  questions  in  public  concern- 
ing the  estimates  of  the  men  who  know  most  about  them.  The 
following  reasons  in  support  of  the  proposed  amendment  were 
submitted  by  the  Committee: 

(1)  The  Committee  were  unanimous  in  their  belief  that  the 
department  heads  would  exercise  a  greater  sense  of  responsi- 
bility when  required  to  submit  their  estimates  according  to 
their  relative  importance,  since  this  duty  of  classification  will 
tend  to  make  the  head  of  each  department  better  acquainted 
with  the  needs  of  his  various  bureaus  and  subordinates. 

(2)  The  Committee  were  unanimous  in  believing  that  the 
departmental  estimates  should  be  revised  by  a  central  executive 
authority  before  being  transmitted  to  the  Legislature. 

(o  )  A  great  majority  of  the  Committee  were  of  the  opinion 
that  this  ultimate  responsibility  of  revising  the  estimates  and 
preparing  the  budget  should  rest  upon  the  Governor.  The  rea 
suns  for  this  opinion  were  that  the  Constitution  imposes  the 
duty  upon  the  Governor  of  seeing  that  the  laws  are  enforced 
;ind  that  the  departments  whose  estimates  comprise  the  greater 
part  of  the  budget  are  the  instruments  through  which  that  duty 
Is  performed.  The  Governor  is  also  the  head  of  the  State  and 
can  best  explain  and  defend  a  given  fiscal  policy  to  the  people 
of  the  Stale.  3ince  he,  above  all  others,  in  upholding  before  the 
people  a  policy  of  economy  should  be  held  responsible  to  them 
for  the  success  or  failure  of  such  a  policy. 

(  1  i  The  ( lommittee  stated  that  no  board  composed  of  several 
co-ordinate  members  could  perform  the  function  of  preparing 
a  budget  with  equal  efficiency,  since  the  necessary  authority 
over  subordinates  weald  be  lacking.  The  Committee  pointed 
"in  that  the  law  of  L913,  creating  a  Board  od  Estimate  for  the 
preparation  of  a  budget,  had  proved  a  failure.  This  Board  con 
sisted  of  the  Governor,  Lieutenant-Governor,  Presidenl  of  the 
Senate,  Speaker  of  the  House,  Chairmen  of  the  Finance  and 
Ways  and    Mean-  CommitteeSj  Comptroller,    Attorney  General 


52 

and  Commissioner  of  Efficiency  and  Economy.  This  Board  was 
composed  of  four  legislative  and  five  executive  members  and 
according  to  the  Committee,  violated  the  principle  which  re~ 
quires  that  the  function  of  opposing  a  budget  should  be  sepa- 
rated from  the  function  of  disposing  of  it.  It  was  pointed  out 
that  although  this  Board  was  given  ample  power  for  the  prepa- 
ration and  revision  of  estimates,  it  at  once  became  deadlocked 
and  was  unable  to  agree.  As  a  result  of  that  failure,  the  Board 
was  soon  abolished  by  statute  and  "its  fate  amply  demonstrated 
the  error  of  confusing  instead  of  defining  responsibility".  Tt 
was  suggested  to  the  Committee  that  the  Comptroller  and  At- 
torney-General should  share  with  the  Governor  the  responsibil- 
ity in  preparing  the  budget.  The  Committee  stated  that  the 
Comptroller  should  be  consulted  in  respect  to  the  budget,  but 
should  not  be  committed  to  it  in  advance,  since  his  services 
should  be  at  the  disposal  of  the  Legislature  in  criticizing  and 
disposing  of  the  budget.  The  Committee  failed  to  see  why  the 
Attorney-General  should  be  a  member  of  the  Committee,  since 
he  was  not  a  financial  officer  and  that  imposing  the  duty  on  him 
to  help  prepare  the  budget  would  be  an  interference  with  his 
functions  as  chief  law  officer  of  the  State  and  impose  a  useless 
burden  upon  him. 

(5)  The  provision  for  public  hearings  before  the  Governor 
upon  the  estimates  was  for  the  purpose  of  securing  publicity 
and  to  minimize  the  danger  of  unfairness  of  allotment  between 
the  different  activities  of  the  State. 

(6)  The  Committee  were  of  the  opinion  that  the  Governor's 
power  of  revision  should  not  extend  over  the  estimates  of  the 
legislative  and  judicial  branches  of  the  State,  but  that  he  should 
have,  of  course,  authority  to  make  recommendations  in  respect 
to  them. 

(7)  The  Committee  fixed  February  1st  as  the  date  for  the 
submission  of  the  budget  to  the  Legislature,  on  the  ground  that 
it  gave  the  Governor  time  for  its  preparation  and  yet  allowed 
ii  to  reach  the  Legislature  in  time  for  full  discussion. 

(8)  The  provision  for  the  appearance  of  the  Governor  and 
departmental  heads  before  the  Legislature  was  for  the  purpose 
of  receiving  publicity  and  criticism  on  the  part  of  the  State 
and  particularly  to  bring  out  any  unfair  treatment  of  any  de- 
partment or  bureau. 

(9)  The  Committee  were  of  the  opinion  that  if  power  were 
left  in  the  Legislature  to  raise  any  item  in  the  proposed  budget, 
it  would  leave  the  door  open  to  an  entire  abandonment  of  the 
budged    system   and   would   result   in   an    immediate  return  to 


53 

present  methods.  The  Committee  also  thought  that  it  would 
tend  to  destroy  all  incentive  on  the  part  of  the  Governor  to  pre- 
pare the  budget  in  advance  and  present  it  with  a  sense  of  re- 
sponsibility. In  order  to  meet  the  objection,  however,  that  the 
Governor  might  misuse  his  power,  either  by  starving  objects 
which  the  Legislature  deems  worthy  or  by  trade  with  individ- 
uals or  localities,  the  Committee  thought  that  the  power  of  in- 
itiation of  financial  legislation  should  be  Left  with  the  Legisla- 
ture, subject  to  but  two  restrictions:  first,  such  power  not  to 
be  exercised  until  after  the  budget  is  finally  disposed  of  by 
both  branches  of  the  Legislature;  second,  that  such  appropria- 
tions must  be  made  by  a  separate  bill  for  each  single  work  or 
object.  The  Committee  were  of  the  opinion  that  this  would 
adequately  protect  the  budget  system  and  yet  keep  it  free  from 
executive  abuse.  The  Governor,  of  course,  retains  the  right  to 
veto  the,  separate  bills  making  appropriations,  but  these  can  In- 
passed  over  his  veto. 

(10)  The  Committee  were  of  the  opinion  that  the  present 
provision,  permitting  appropriations  to  continue  for  two  years, 
should  be  changed  so  that  all  appropriations  must  expire  three 
months  after  the  end  of  the  fiscal  year.  This  provision  would 
make  all  appropriations  expire  simultaneously  and  yet  would 
give  time  for  the  payment  of  any  bills  accruing  late  in  the  pre- 
ceding fiscal  vear. 

The  Committee  answered  the  objection  that  the  proposed 
system  would  give  undue  power  to  the  Governor,  by  saying  that 
it  does  not  add  one  iota  to  his  present  power  through  the  veto 
of  items  in  the  appropriation  bills.  On  the  other  hand,  the 
Commfttee  pointed  out  that  the  power  which  the  Governor  now 
exercises  is  not  subject  to>  review,  since  the  Legislature  ad- 
journs before  the  appropriation  bills  reach  him,  and  that  he  is 
thus  in  a  position  to  use  the  veto  power  as  an  instrument  of 
reward  or  punishment,  while  the  proposed  system  would  de- 
prive him  of  his  veto  as  to  budget  items  and  would  thus  "com- 
pel him  to  use  his  influence  in  advance,  in  open,  under  the  fire 
of  legislative  discussion  and  the  scrutiny  of  the  entire  State. 
It  would  thus  be  the  Legislature  which  would  have  the  final 
word."  The  proposed  system  would,  in  the  view  of  the  Com 
mittee,  require  the  Governor  to  devise  systematic  and  rational 
methods  of  saving,  since  <ui  him  would  squarely  fall  the  re 
sponsibility  for  extravagance  and  to  him  would  1m-  given,  as 
never  before,  credit  for  wise  economy. 

The  conclusions  of  the  Committee   were  based    largely   upon 
information  produced  at  the  hearings  on  the  subject.     For  ex 


54: 

ample,  former  President  Taft  gave  very  strong  endorsement  to 
the  idea  of  an  executive  budget,  stating  that  he  was  convinced 
that  there  was  no  hope  of  real  economy  in  the  Federal  Govern- 
ment until  Congress  gave  the  Executive  power  and  the  means 
to  prepare  a  full  statement  of  expenditures  for  which  he  was 
willing  to  become  responsible.     He  stated  that  two  of  the  Com- 
mittees composed  of  the  ablest  men  in  Congress,  one  in  the 
House  and  one  in  the  Senate,  had  recommended  this  system. 
He  emphasized  the  fact  that  many  of  the  appropriations  were 
made  by  Congress,  without  real  regard  for  the  needs  of  the 
government,   since  the  members  represent  their   congressional 
districts  and  not  the  entire  country.     He  said  that  the  man 
from  the  interior  condemns  the  river   and  harbor  bills,   but 
that  this  same  man  would  approve  an  appropriation  of  $500,- 
000  for  a  postomce  in  a  town  needing  only  a  $100,000  post- 
office,  and  that  the  reply  of  this  man  to  criticism  of  appropria- 
tions of  this  kind  is,  "Well,  this  government  is  a  great  govern- 
ment and  it  needs  a.  dignified  place  for  its  offices'1.     He  pointed 
out  that  if  the  government  was  to  be  shackled  for  fear  that  the 
people  might  elect  a  bad  Governor  some  time,  the  result  would 
be  an  ineffective  government. 

President  Lowell,  of  Harvard  University,  gave  informa- 
tion in  regard  to  the  English  budget  system,  recounting  the  fact 
that  since  1713  the  House  of  Commons  had,  by  a  permanent 
order,  deprived  itself  of  the  power  to  increase  any  appropria- 
tions recommended  by  the  cabinet.  President  Lowell  stated 
that  for  two  hundred  years  that  rule  had  been  followed  and 
that  it  had  been  very  effective.  He  also  stated  that  he  re- 
garded the  budget  as  a  public  matter  and  not  a  collection  of 
private  matters  and  that  it  was,  therefore,  wiser  to  have  it  origi- 
nated by  public  officials  and  not  by  a  lot  of  people  who  repre- 
sent private  and  local  interests.  He  criticised  the  present  "log 
rolling"  methods  of  making  appropriations  and  said  that  instead 
of  giving  the  individual  member  of  the  Legislature  the  right  to 
initiate  and  the  Governor  to  yeto,  it  would  be  much  better  to 
Im  the  Governor  initiate  and  the  Legislature  veto,  in  so  far  as 
appropriations  are  concerned. 

Presidenl  Goodnow,  of  the  Johns  Hopkins  University,  ap 
peared  before  the  Committee  and  endorsed  the  idea  of  an  execu 
live  budget.  President  Goodnow  also  stated  thai  he  had  drafted 
;i  provision  for  the  Constitution  of  China,  which  prohibited  the 
legislative  bodies  there  from  passing  any  bill  making  an  appro 
priation  until  it  had  first  been  recommended  by  the  President. 
This  provision  also  prohibited  the  legislative  body  from  increas- 


00 


ing  the  amount  recommended  by  the  President.  He  stated  that 
practically  in  every  English-speaking  country  except  the  United 
States,  a  rule  of  this  sort  had  been  adopted  in  order  to  prevent 
the  practice  of  "log  rolling".  He  called  attention  to  the  fact 
that  the  idea  prevalent  in  this  country,  that  the  Legislature 
should  have  the  power  to  initiate  and  pass  appropriations  in 
order  to  control  the  purse  strings,  is  not  in  keeping  with  the  old 
idea  as  to  control  over  the  purse  strings.  He  said  that  originally 
the  theory  was  to  close  the  purse,  not  to  open  it,  but  that  the 
present  system  seemed  to  advocate  the  opening  of  the  purse, 
while  leaving  with  the  Governor  the  right  to  dose  it. 

Mr.  Fitzgerald,  Chairman  of  the  Ways  and  Means  Commit- 
tee of  the  National  House  of  Representatives,  called  the  atten- 
tion of  the  Committee  to  the  fact  that  Article  1,  Section  9  of 
the  Confederate  Constitution,  provided  for  the  submission  of 
requests  to  the  legislative  body  for  the  expenditures  on  account 
of  the  Confederate  Government,  and  that  it  required  a  two- 
thirds  vote  of  both  Houses  to  appropriate  any  money,  unless  so 
requested  by  the  President.  Mr.  Fitzgerald  criticized  the  pres- 
ent methods  of  making  appropriations  by  the  National  Con- 
gress. He  advocated  the  concentration  of  power  and  the  con- 
centration of  responsibility,  if  effective  results  were  to  be  ob- 
tained. He  was,  therefore,  in  favor  of  having  the  budget  pre- 
pared by  the  Executive,  but  would  not  make  it  absolutely  im- 
possible for  the  legislative  body  to  initiate  appropriations,  but 
he  would  make  it  so  difficult  that  it.  would  only  be  done  under 
the  most  peculiar  and  extraordinary  circumstances. 

The  hearings  before  the  Committee  which  were  printed  cov- 
i  rod  about  175  pages  and  the  limits  of  this  article  make  it  im- 
possible to  give  anything  like  a  summary  of  the  testimony  given, 
but  the  above  statements  show  that  the  Committee  adopted  the 
suggestions  which  were  given  by  those  who  appeared  before 
them.  Furthermore,  quite  a  number1  of  the  hearings  were  nol 
printed. 

Mr.  Robert  Wagner,  a  member  of  the  Finance  Committee  of 
the  Convention,  filed  a  minority  reporl  againsl  the  proposed 
budget  system.  Mr.  Wagner  has.  for  quite  a  while,  hem  the 
Democratic  leader  in  the  State  Senate  and   a   member  of  the 

Finance  Committee  of  thai  body.     Ee  disagr 1  with  the  mem 

hers  of  the  Committee,  believing  that  all  appropriations  should 
originate  in  the  legislative  branch  of  the  govt  rnment.     He  tools 
the  view  that   the  term  "executive  budget"  could   nol   properly 
be  applied  to  the  British  budget,  since  the  cabinet  there  Is  emu 
posed  of  member  of  the  legislative  bodies  and  that  it  is  really 


56 

a  "parliamentary"  and  not  an  "executive  budget".  He  also 
stated  that  the  report  of  the  Committee  was  inadequate  and 
inconsistent,  maintaining  that  if  publicity  is  desirable  on  mere 
matters  of  administration,  it  was  particularly  desirable  on  spe- 
cial appropriation  bills.  He  thought  that  if  the  Governor  were 
to  be  prevented  from  making  a  political  football  of  routine 
appropriations,  he  should  also  be  prevented  from  making  a  po- 
litical football  of  special  appropriation  bills.  He,  therefore, 
advocated  the  insertion  of  a  provision  requiring  the  members 
of  the  Legislature  to  file  copies  of  proposed  special  appropria- 
tion bills  with  the  Governor,  the  Comptroller,  and  the  members 
of  the  Legislature  fifteen  days  prior  to  the  assembling  of  the 
Legislature.  He  would  also  have  it  a  part  of  the  duty  of  the 
Governor  to  submit  a  budget  on  these  special  bills  within  fif- 
teen days  after  the  Legislature  meets,  together  with  his  recom- 
mendations on  tliem.  He  took  the  position  that  this  treatment 
of  special  appropriation  bills  would  abolish  the  evils  complained 
of  by  the  majority  report,  namely,  the  rewarding  of  friends  or 
punishing  of  enemies  by  preference  in  case  of  special  appro- 
priation bills.  He  also  thought  that  sworn  statements  should 
accompany  the  requests  made  for  appropriations  to  be  submit- 
ted to  the  Governor  by  the  heads  of  departments  and  institu- 
tions. As  stated  above,  Mr.  Wagner  was  really  in  favor  of  a 
legislative  budget  instead  of  an  executive  budget. 

The  question  of  a  State  Budget  was  debated  quite  at  length 
in  the  Convention  itself,  but  as  these  debates  cover  about  150 
pages,  it  is  impossible  to  give  a  summary  in  this  article.  The 
sources  consulted  in  the  preparation  of  this  article  are  the  pro- 
ceedings of  the  New  York  Constitutional  Convention,  the  pro- 
posed budgets  in  Wisconsin,  Ohio,  California  and  Indiana,  and 
the  report  of  the  Legislative  Investigating  Committee  of  Ala- 
bama, all  of  which  are  on  file  in  the  Department  of  Legislative 
Reference  of  Baltimore. 


PAMPHLET  BINDER 

^^Z    Syracuse,  N.  Y. 
Stockton,  Calif. 


jAL  LIBRARY  FACILITY 


